2020
ANNUAL REPORT
ABN 37 148 168 825
Solicitors
HWL Ebsworth
Directors
Level 20/240 St Georges Terrace,
John Terpu
(Executive Chairman)
Perth WA 6000
Kathleen Bozanic
(Independent Non-executive Director)
Telephone:
(08) 9420 1500
Andrew Caruso
(Independent Non-executive Director)
Executives
Sean Gregory
Mark Petricevic
(Chief Executive Officer)
(Company Secretary / Chief Financial
Officer)
Registered Office and Principal Place of Business
Suite 4, 213 Balcatta Road
Balcatta WA 6021
Telephone:
Facsimile:
(08) 9240 4111
(08) 9240 4054
Email: admin@gsml.com.au
Website: www.gsml.com.au
Auditors
HLB Mann Judd (WA Partnership)
Level 4, 130 Stirling Street
Perth WA 6000
Telephone:
Facsimile:
Share Register
(08)
9227 7500
(08) 9227 7533
Link Market Services Limited
Level 12, 680 George Street
Sydney NSW 2000
Telephone: (within Australia): 1300 554 474
Telephone: (outside Australia): +61 (02) 8280 7100
registrars@linkmarketservices.com.au
Securities Exchange Listing and domicile
Great Southern Mining Limited is an Australian Company
limited by shares and listed on the Australian Securities
Exchange (ASX: GSN)
CONTENTS
PAGE
Operating and Financial Review ............................................................................................................................ 2
Directors’ Report .................................................................................................................................................. 15
Auditor’s Independence Declaration ................................................................................................................... 31
Corporate Governance Statement ....................................................................................................................... 32
Statement of Profit or Loss and Other Comprehensive Income .......................................................................... 33
Statement of Financial Position ............................................................................................................................ 34
Statement of Cash Flows ..................................................................................................................................... 35
Statement of Changes in Equity .......................................................................................................................... 36
Notes to the Financial Statements ....................................................................................................................... 37
Directors’ Declaration .......................................................................................................................................... 73
Independent Auditor’s Report ............................................................................................................................. 74
ASX Additional Information ................................................................................................................................. 78
1
OPERATING AND FINANCIAL REVIEW
The year to 30 June 2020 has been a busy one for
Great Southern Mining Limited (the Company or GSN)
with three completed drill programs on the Cox’s
Find and Mon Ami Gold Projects in Western Australia
with baseline soil sampling work undertaken at
Edinburgh Park in North Queensland along with
the highly encouraging Hyperspectral Survey co-
funded by Evolution Mining.
A summary of the main exploration activities during
the period is below:
Western Australia:
Cox’s Find Gold Project (the Project or Cox’s Find)
the acquisition of
Following
in
September 2019, the Company immediately set about
aggressively exploring the Project with a 17-hole
Reverse Circulation (RC) program completed for a
total of 2,658m.
the Project
focused on
The 2019 RC program
targeting
shallow high-grade gold mineralisation adjacent to
the historic underground developments which
produced 77,000 ounces of gold at 22g/t from
1936-1942.
Notable high-grade intersections included:
• 5m at 31.23 g/t gold from 134m, including 1m at
143.0 g/t (19CFRC013).
• 2m at 36 g/t gold from 146m, including 1m at
68 g/t (19CFRC004).
• 5m at 14.54 g/t gold from 140m, including 2m at
28.85 g/t (19CFRC009).
• 8m at 9.43 g/t gold from 73m, including 1m at
44 g/t (19CFRC002).
• 6m at 7.90 g/t gold from 132m, including 1m at
35.9 g/t (19CFRC011).
The highly successful program not only provided some
exceptional intersections but also proved the remnant
mineralisation was in place with valuable structural
information obtained.
Further details can be found in the ASX announcement
on 26 November and 19 December 2019.
2
A geochemical program in March 2020 revealed
encouraging anomalous
significant
associations with gold and associated key pathfinder
elements (As-Cu-Zn-Bi-Se). These results were then
correlated to the geophysical mapping (refer to ASX
announcement on 22 April 2020).
zones with
Following additional interpretation of the drill results
and geochemical programs, a successful $3.14m
capital raising was completed in May 2020. The
Company commenced a two-phase, 9,000m drilling
program consisting of RC and Diamond Drilling (DD)
in early June 2020.
The DD program consisted of a five-hole diamond tail
program designed to intersect the Cox’s Find main lode
in areas of high-grade mineralisation and build on the
understanding of the structural orientation of the high
grade mineralisation to give insight to the structural
constraints which can be used for the future drilling
programs. The first DD hole was highly successful
with a spectacular gold intersection produced of
5.65m @ 80.0 g/t gold from 160.05m including a
bonanza intercept of 1.1m @ 404.0 g/t gold from
164.6m noted, refer to the ASX announcement on 29
July 2020 (photo at Figure 1).
Figure 1: Visible gold from 164.6m in 20CFRCD004.
An oblique isometric view of the spectacular gold
intersections is shown at Figure 2.
Figure 2: Oblique isometric view highlighting the spectacular gold intersections into the unmined panel at level 5-6 of Cox's Find
3
Cox’s Find Gold Project (continued)
Whilst exploration work at Cox’s Find is still at an
early stage, the 2020 drilling has returned significant
intersections of gold mineralisation within a possible
larger gold-hosting system.
In addition to the bonanza intersection from the
diamond hole, highlights of the 2020 program
included the following :
• 9m @ 5g/t gold from 142m within a broader zone
of 16m @ 3.7g/t gold from 138m (20CFRC0015).
• 2m @ 14.0 g/t gold from 146m (20CFRC0014).
• 3.6m @ 8.03 g/t gold from 168m (20CFRCD008).
• 13m @ 1.14 g/t gold from 167m (20CFRC0034).
• 5m @ 5.51 g/t gold from 59m (20CFRC0029).
20CFRC015 was drilled through the Cox Find main
mine lode (the focus of the historical mining) and
was drilled 20m north east from the spectacular gold
intersection of 5.65m @ 80.0 g/t gold in diamond core
20CFRCD004.
A broad zone of mineralisation of 16m @ 3.7g/t gold
from 138m with a higher-grade core of 9m @ 5g/t gold
from 142m was intersected. The results suggest the
high-grade main lode was intersected at 150 to 151m
downhole with a high-grade assay result of 20.1 g/t
gold. This is highly encouraging and suggests that the
main lode has excellent grade continuity at this level
and requires follow up drill testing.
20CFRC0014 was drilled 40m north of the known
interpreted main mine lode and was designed to test
if mineralisation persisted along strike of the main lode
(Figure 3). A gold intersection of 2m @ 14.0 g/t gold
from 146m, within a quartz vein was produced. The
results demonstrate that mineralisation persists further
north than previously interpreted or is a new high-
grade lode shoot.
Overall, the results are extremely pleasing with
excellent gold continuity and demonstrated high
grade ore north of the existing workings that warrant
follow up drilling for the second half of 2020.
Figure 3: Plan View of Cox’s Find highlighting recent drill results with maximum downhole gold values.
4
Cox’s Find Gold Project (continued)
Additional tenure applications
Subsequent to year end, the Company announced it
had lodged applications over 4 strategic and highly
to
prospective
Cox’s Find. GSN has made applications over the
tenements in Table 1:
immediately adjacent
tenements
Table 1:
Tenement
E38/3518
P38/4523
P38/4524
P38/4525
Tenement Area km2
(approximate)
50
0.25
0.25
0.40
50.90
Once granted, the tenement applications could
increase the Project tenure to a total of 54km² and
include over 12km of access to the clearly identifiable
mineralised trends that host both the Garden Well and
Rosemont gold deposits owned by Regis Resources
Limited (ASX: RRL). Refer Figure 4.
Figure 4: Plan view of the Cox’s Find Project (light blue) and the
applications lodged (dark blue) highlighting mineralised trends
(red dashed lines).
5
Mon Ami Gold Project (Mon Ami or the Project)
During 2020 a considerable amount of planning and
revaluation of the geological model took place to
design a 20-hole RC program consisting of 2,763m
which commenced in June 2020 and was completed
in July 2020. The recent drill program was designed
along a mineralised NNE striking regional shear zone,
targeting areas which sit outside or on the edge of the
current southern extent of the Resource area.
Drilling also targeted historic shafts along the shear
which have extracted gold in the early 20th century
and where the presence of cross cutting or NE splays
have been mapped in close proximity to the main shear
zone (Figure 5).
A number of gold bearing shoot extensions have
been identified along strike and down plunge of the
current resource area. The extension along strike
has yet to be fully tested and will be a focal point
for follow up drilling.
The following highlights were noted and announced to
the ASX on 7 August 2020:
•
•
Shallow high-grade gold intersection of 11m
@ 7.9 g/t gold from 26m including 4m @ 15.9
g/t gold in (20MARC011).
4m @ 12.4 g/t Au from 80m (20MARC003).
Drilling focused on the southern extent of resource
area and remains open along strike and at depth, refer
Figure 6.
Processing and interpretation of recent results is
underway, and the Company believes that there is
further scope to target the intersection points of the
NE splays intersecting the regional shear zone to target
the high grade mineralisation.
Planning for step out drilling both to the north and
south of Mon Ami is underway.
Figure 5: Section view between MLRC024 and 20MARC011 of the Mon Ami Gold Project highlighting the
location of recent high-grade intercept. BOCO = Base of complete oxidation. TOFR = Top of Fresh Rock.
6
Figure 6: Plan view of the Mon Ami Gold Project highlighting the location of high-grade intercepts (black text recent) and the presence of high
grade mineralisation at the intersection of NE splays and the mineralised contact.
7
The hyperspectral results and interpretation have
reinforced field observations at a number of known
prospects (e.g., Fish Creek, Mt Dillon) and identified
many new significant high-sulphidation hydrothermal
centres or ‘hot spots’.
The newly identified epithermal targets indicate and
supports the potential for multiple mineralised deposit
discoveries within similar NE-trending structural
corridors within the Permian volcanics. Mineral
mapping and hyperspectral images for several of these
prospects are presented in ASX announcement on
15 April 2020.
Fish Creek, Mt Dillon, and the newly interpreted
Edinburgh Castle, Whydah South and Bogie Range
prospects are considered high priority targets due to
the scale of the advanced argillic zones evident in the
hyperspectral data which can extend up to ~2 km and
are comparable to those alteration ‘hot-spots’ which
host the Mt Carlton.
The hyperspectral survey was part of the Company’s
philosophy of conducting modern ‘smarter’ exploration
techniques to screen the whole of project for evidence
of new economic mineral systems.
In June 2020 the company undertook additional
processing of hyperspectral data to assist with
identifying
indicative geological
alteration systems related to porphyry and Intrusive
Related Gold Systems (IRGS). The interpretation and
results were summarised as follows:
illuminations of
•
•
Nineteen (19) illumination targets consistent
with porphyry mineralisation alteration systems
were identified.
Due to the scale of the alteration zones evident
in the hyperspectral data, which can extend
up to ~2 km, combined with the evidence
of alteration zonation, three (3) targets are
considered to be high priority targets and a
further ten (10) smaller scale illuminations are
considered to be secondary targets.
Edinburgh Park – Queensland
The Company announced in October 2019 that it had
entered an agreement with Evolution Mining Limited
(ASX: EVN) to co-fund a hyperspectral survey over
the Company’s 100% owned Edinburgh Park and
Johnnycake Projects in North Queensland (Refer Figure
10).
With the aid of a specialist consultant the Company
undertook processing of this data to assist with
indicative geological
identifying
alteration systems. The
interpretation was
focused on epithermal style mineralisation systems.
The following results were presented:
illuminations of
initial
•
•
•
•
•
•
A significant number of illumination targets
were identified exhibiting indicative geological
footprints consistent with Mt
alteration
Carlton-style high-sulphidation epithermal
mineralisation.
Five (5) are considered to be high priority
targets and a further ten (10) secondary
epithermal.
Several priority targets show approximately
2 km extent of advanced argillic alteration -
‘hot-spots’ zones; evident and comparable to
those deposits which host the Mt Carlton style
mineralisation.
A number of sizeable low-sulphidation veins
or vein set targets have also been interpreted
within larger target areas.
The targets generated by initial hyperspectral
interpretation, will allow a focused field
exploration program around
the highly
prospective systems.
Interpretation of the hyperspectral data is
ongoing for other styles of gold mineralisation
zones known to exist in this district.
The survey was designed to gather substantial
geophysical data to assist with target delineation
and comes off the back of the reconnaissance drilling
program undertaken earlier
(refer ASX
announcement on 5 July 2019). Drilling intersected a
significant zone of well-developed, high-sulphidation
epithermal-style mineralisation below the surface of
the main outcrop discovery.
in 2019
8
The Company also completed mapping and initial
geochemical survey work over a 10 km2 area covering
the porphyry stockwork north of Beaks Mountain within
the Leichhardt Creek prospect area, a prospective
porphyry and IRGS system. This geochemical mapping
program is the first systematic gold focused exploration
program undertaken over these highly prospective
targets, which were identified from interpretation
of hyperspectral data with geological mapping and
geophysics.
Porphyry mineralization at Leichhardt Creek was
noted and is associated with multiple intrusions and
porphyritic dykes of diorite to quartz monzonite
composition with associated stockwork sulphide and
quartz-sulphide vein development and fracture fill.
Multiple breccia occurrences (e.g., Rocky Ponds) are
present along the margins of the stockwork zones and
are associated with Au-Ag-Cu mineralisation.
The geochemical mapping and sampling program
collected around 652 soil samples and 11 rock chip
samples completed on a wide spaced grid. The
geochemical mapping program, the first systematic
gold focused exploration program undertaken in this
area, was completed on a wide spaced (100m x 100m)
grid over highly prospective targets identified from
interpretation of hyperspectral data in conjunction
with reconnaissance geological mapping and aerial
geophysics. Results were released to the market on
16 July 2020 with gold and molybdenum zones noted
(Figures 7 and 8).
Figure 7: Soil Survey
Leichardt Creek Prospect
pathfinder
showing zonation interpretation.
elements
results at
the
(anomalous
90th percentile)
Figure 8: Insert A - Soil Survey results over
main central Core Zone at the Leichardt
Creek Prospect showing Base Metal and
Core zone area.
9
Geological Mapping
In addition to the soil sampling, reconnaissance
geological mapping has been completed. This mapping
outlined the presence of sheeted parallel arrays of low-
sulphide (<5%), single stage quartz veins which may
extend for 100’s of metres and up to 10’s of metres
wide. The veins are filled compact fine comb quartz
and commonly have a gossanous core of goethite
and manganese oxides after sulphide. Where primary
sulphide mineralisation is preserved, mineralisation
consists of disseminated and microveinlet pyrite,
with lesser chalcopyrite (CuS), spalerite (ZnS), galena
(PbS) and Molybdenite (MoS). Alteration associated
with the sheeted vein system is expressed as narrow
centimeter-scale selvedges of phyllic alteration with
intervening fresh unaltered host rock. The lack of
pervasive alteration is consistent with the subdued
hyperspectral signal and further supports an IRGS as
opposed to a typical porphyry alteration halo.
The sheeted complex, the broader Beaks Mountain
intrusive complex, hosts multiple lines of evidence
for the presence of mineralizing plutons and the
likelihood of large-scale hydrothermal fluids, including
microgranites and porphyry textures, metal-bearing
granophyres, miarolitic cavities and unidirectional-
solidification textures that support a pluton apices
setting.
Several mineralised breccias
(e.g., Rocky Ponds
Breccia) have also been identified with the broader
sheeted vein system.
The demagnetised zone correlates extremely well with
anomalous surface soil gold and other IRGS pathfinder
trends (Au,As,Sb,Sn,Bi, & Ag), and also display a clear
metal zonation from NE to SW (Figure 10). Importantly
the northern contact of the NE trending demag
zone (being the faulted contact with the diorite) is
considered the fundamental controlling structure for
the emplacement of intrusive phases and the loci of
alteration and mineralisation.
Figure 9: Anomalous geochemistry zones at the Leichardt Creek draped over RTP magnetic image.
10
Figure 10: Location and geology of GSN’s Edinburgh Park Project relative to the Mt Carlton Mine owned and operated by
Evolution Mining Limited
Figure 10: Location and geology of GSN’s Edinburgh Park Project relative to the Mt Carlton Mine
owned and operated by Evolution Mining Limited
Great Southern Mining Limited | 37 147 168 825
10
11
Corporate
Financial Position and Performance
The following significant matters and changes during
the period have occurred:
The Company’s net assets increased 106% from the
year ended 30 June 2019 due to capital raising activities
during the year and the acquisition of Cox’s Find.
The Company held $3.06m as cash and cash equivalents
at 30 June 2020.
Operating cash outflows for the period totalled $1.32m
with cash outflows from investing activities totalling
$1.84m being the cash costs of the exploration
programs across the Company’s projects during the
year. We note the emphasis of matter paragraph
regarding the going concern assumption included
in the auditor’s report, refer to Note 1(w) for further
disclosure. The Auditors Report on the Financial
Statements included in this Annual Report includes
an emphasis of matter related to going concern. The
audit opinion is not modified in relation to this matter.
The Company has performed in a manner consistent
with that of a junior exploration company. The focus
during the period was on undertaking drilling and
exploration programs. The net loss for the period of
$1.87m is reflective of the corporate and overhead
costs incurred in ensuring regulatory compliance is
maintained, legal fees incurred in relation to corporate
activities during the year and a non-cash charges such
as the share-based payments expense.
The Company also employed a Chief Operating Officer
in February 2020 and full-time Exploration Manager in
Western Australia in May 2020. Therefore, the full year
to 2020 included the pro-rata payments made to these
individuals compared to nil in 2019.
In September 2019 the Company successfully
raised $835,884 before costs via a Rights
Issue (Offer) to shareholders of New Options.
Details were announced to the market on
4 September 2019. The shortfall under the
Offer was 17,548,997 New Options placed in
October 2019.
On 30 July 2019 the Company entered a
$500,000 Director Loan facility with an entity
related to Mr John Terpu. The loan is on
commercial terms bearing an interest rate of
9.9%pa. The loan is unsecured and on an arm’s
length basis with $300,000 owing at the date
of this report.
In October 2019 the Company completed
placement to institutional and sophisticated
investors of 27,000,000 Fully Paid Ordinary
Shares at $0.045 per share and 27,000,000
Listed Options exercisable at $0.05 per Option
on or before 4 September 2022. Total funds
raised was $1.485m (before costs).
In February 2020, the company appointed
Mr Mark Major as Chief Operating Officer of
the Company. Mr Major resigned from the
Company in September 2020.
On 14 May 2020, the Company completed a
successful placement of 70,000,000 fully paid
ordinary shares at $0.045 each with 1 free
attaching Listed Option for every 4 shares
issued (total of 17,500,000 to be issued). The
placement raised $3.15m before costs. Refer
ASX announcement on 8 May 2020.
In May 2020 the Company announced the
deferral of the $0.8m payment due to the
Vendor of Cox’s Find until August 2021. As
consideration for the deferral, the Company
paid the Vendor $0.1m cash.
On 12 June 2020, 5,000,000 of the Unlisted
issued above were exercised,
Options
generating the Company a further $0.3m.
•
•
•
•
•
•
•
12
Future Prospects
As discussed elsewhere in the Review of Operations
Report, the Company will be looking to undertake
additional exploration programs on
its Western
Australian and Queensland projects.
Further disclosure of information regarding likely
developments in the operations of the Company in
future financial years and the expected results of those
operations is likely to result in unreasonable prejudice
to the Company. Therefore, this information has not
been presented in this report.
Business Risks
The Company is subject to a number of risks that could
potentially have an adverse impact on the performance
of the Company. The Company has in place policies
and procedures to monitor and manage these risks
which can broadly be catergorised as:
•
•
•
•
•
commodity prices;
currency risks;
market risks;
liquidity risks; and
credit risks.
The Company, as a gold exploration company, faces
inherent risks in its activities including tenement and
title, exploration funding, project exploration risk,
environmental and social sustainability risks, which
may materially impact the Company’s operations. The
Company has in place procedures for reporting and
monitoring of such risks which are continually being
reviewed and updated to help manage these risks. The
Board also believes that it and the management team
have a thorough understanding of the Company’s
key risks in these areas and are managing them
appropriately.
Additionally, liquidity risk is a constant focus of the
Directors’ being mindful of the ability of the
to meet
Company to
expenditure
further drilling
programs. Further disclosure of these financial risks
can be found in Note 21 to the Financial Statements.
raise additional capital
commitments and
The impact of the COVID-19 pandemic continues to
pose a number of global socio-political, economic
and health risks that may cause an impact on the
Company’s operations. The potential for the pandemic
to be ongoing with unforeseen impacts is high. The
Company has implemented procedures to protect the
wellbeing of staff and contractors and ensure business
continuity. The Company continues to monitor and
respond to the risk of the pandemic commensurate
with the risks in accordance with the Government
recommendations and health advice.
Competent Persons Statement
The information in this Annual Report relating to the
Company’s Exploration Results and Mineral Resources
Estimates is based on and fairly represents information
compiled by Simon Buswell-Smith and Dr Bryce Healy.
The Competent Persons have sufficient experience
that is relevant to the style of mineralisation and type
of deposit under consideration and to the activity
being undertaken to qualify as a Competent Person as
defined in the JORC Code (2012 edition).
(Geostatstics) BSc honours
The information in this report that relates to the Mineral
Resources estimation approach at Mon Ami is based on
information compiled by Dr Michael Cunningham,
GradDip,
(Geoscience),
PhD, MAusIMM, MAIG. Dr Cunningham is a Principal
Consultant, full-time, of SRK Consulting (Australasia)
Pty Ltd. He has sufficient experience relevant to the
assessment and of this style of mineralisation to qualify as
a Competent Person as defined by the “Australasian
Code for Reporting of Exploration Results, Mineral
Resources and Ore Reserves – The JORC Code (2012)”.
information
The information in this Review of Operations has
contained
that has been extracted
from a number of ASX announcements released
during the year and up to the date of this report.
All announcements are available to view on the ASX
platform (ASX: GSN) and the Company’s website at
www.gsml.com.au. The Company confirms that it is not
aware of any new information or data that materially
affects the information included in the original market
announcement. The Company confirms that the form
and context in which the Competent Person’s findings
are presented have not been materially modified from
the original market an announcement.
13
Forward Looking Statements:
Forward- looking statements are only predictions and
are not guaranteed. They are subject to known and
unknown risks, uncertainties and assumptions, some
of which are outside the control of the Company.
Past performance is not necessarily a guide to future
performance and no
representation or warranty
is made as to the
likelihood of achievement or
reasonableness of any forward-looking statements or
other forecast. The occurrence of events in the future
are subject to risks, uncertainties and other factors that
may cause the Company’s actual results, performance
or achievements to differ from those referred to in this
announcement. Given these uncertainties, recipients
are cautioned not
forward
to place
looking statements. Any forward- looking statements in
this announcement speak only at the date of issue of
continuing
this
obligations under applicable law and the ASX Listing
Rules, the Company, its directors, officers, employees
and agents do not give any assurance or guarantee
that the occurrence of the events referred to in this
announcement will occur as contemplated.
announcement. Subject
reliance on
any
to
Statements regarding the Company’s plans with respect to
Mineral Resources, exploration programs and future
developments are forward-looking statements. There
can be no assurance that the Company’s plans will
proceed at stated times in the future. Additionally,
future drilling programs and outcomes presented are
based on current estimates using information available at
the time of the documents preparation. There is no
guarantee that the programs will confirm the presence of
additional Mineral Resources.
14
DIRECTORS’ REPORT
Your Directors submit the annual financial report of
Great Southern Mining Limited, (the Company), for the
year ended 30 June 2020.
Mr Andrew Caruso B.Eng (Mining) (Hons), Grad
Dip. Applied Finance & Investment – Independent
Non-executive Director
The names of Directors and the Secretary who held
office during or since the end of the year and until the
date of this report are as follows.
John Terpu – Executive Chairman
(Appointed Non-executive Chairman 12 January 2011,
appointed Executive Chairman 1 July 2013)
Mr Terpu has over twenty years’ of commercial and
management expertise gained in a broad range
of business and investment activities. He has been
involved in the mining and exploration industry through
the acquisition and investment in a number of strategic
exploration and mining projects. Mr Terpu has a
wide range of contacts in the exploration and mining
investment community. No other public Company
directorships were held in the previous three years.
Kathleen Bozanic
B.Com, CA ANZ, AICD – Independent Non-executive
Director
(Appointed 26 April 2018)
commercial
leadership
and
Ms Bozanic
is a chartered accountant with over
twenty five years of experience
in compliance,
risk,
governance,
financial
and
management,
including
experience
in
restructuring. Ms
transformation
strategic
Bozanic also has considerable experience as an
Audit Partner, Chief Financial Officer and the General
Manager of Finance in the mining and construction
sector. Ms Bozanic was appointed to the board of
IGO Limited as a Non-executive Director on 3 October
2019. No other public Company directorships were
held in the previous three years.
(Appointed 26 April 2018)
Mr Caruso is a mining engineer with over twenty six
years’ experience in the Australian and international
mining industries with a focus on corporate leadership,
business development, operations and
strategic
planning and mine management. His experience
includes over nine years as
the chief executive
for a number of iron ore and coal operations and
development companies. Mr Caruso was appointed
the board Atrum Coal Limited as Managing
to
Director on 12 August 2020. No other public Company
directorships were held in the previous three years.
Mark Petricevic CA ANZ, AGIA, B.Com
Company Secretary
(Appointed 30 April 2018)
Mark is a chartered accountant with over seventeen
years’ experience in accounting, financial reporting,
audit and corporate advisory including four years as an
Audit and Assurance Partner. Mark has had no public
Company directorships in the previous three years.
Directors’ Meetings
The number of meetings of the Company’s Board
of Directors attended by each Director during the
year ended 30 June 2020 was as follows:
Number
of Board
Meetings Held
Whilst in Office
Number of
Board Meetings
Attended
J. Terpu
K. Bozanic
A. Caruso
11
11
11
11
10
11
15
DIRECTORS’ REPORT
Interests in the shares and options of the Company
and related bodies corporate
The following relevant interests in shares and options
of the Company or a related body corporate were
held by the Directors as at the date of this report.
Directors
Number of fully
paid ordinary
shares
Number
of fully
paid Listed
Options
Listed Options
On 4 September 2019 the Company completed
a non-renounceable pro rata entitlement issue to
Shareholders of one (1) New Listed Option for every
three (3) Shares held by Eligible Shareholders at an
issue price of $0.010 per New Listed Option. The
New Listed Options are exercisable at $0.05 each on
or before 4 September 2022. The directors took up
their entitlements and were issued the options on 4
September 2020. The Directors have not undertaken
any further trading in Listed Options during the period.
J. Terpu
125,309,351
39,103,118
Unlisted Options
K. Bozanic
A. Caruso
1,200,000
1,200,000
400,000
400,000
Details of Unlisted Options issued by the Company
during or since the end of the financial year, and
ordinary shares issued as a result of the exercise of an
Unlisted Option are:
Opening Balance – 1 July 2019
Details of Shares Issued during
the Period
Exercise of Unlisted Options -
20 September 2019
Note
Date
options
granted
Expiry date
Exercise
price of
shares ($)
Number
under options
12,100,000
16-Nov-18
31-Dec-19
$ 0.02
(300,000)
Cancellation of Unlisted Options
14-May-18
31-Dec-19
$ 0.02
(11,800,000)
Issue of Unlisted Options under the
Long-Term Incentive Plan
Issue of Unlisted Options to
Corporate Advisers
Exercise of Unlisted Options by
Corporate Advisers
Refer to Note A
3,000,000
B
14-May-20
04-Sep-22
$ 0.06
10,000,000
Closing Balance – 30 June 2020
130,619
132,468
(5,000,000)
8,000,000
Since the end of the financial year, 1,000,000 Unlisted Options were exercised by the former Chief Operating Officer.
16
DIRECTORS’ REPORT
Unlisted Options (continued)
Note A:
The Unlisted Options issued on 27 February 2020 had a number of market-based vesting conditions.
The fair value of each tranche was determined through the use of a Monte-Carlo option price calculation.
Vesting Conditions attached to A
Tranche
Options –
no.
Options
– exercise
price
Tranche 1
1,000,000
$0.05
Tranche 2
1,000,000
$0.05
Tranche 3
1,000,000
$0.05
Vesting Condition
Expiry date
Fair value
($) per
option
Executive remains an employee of the
Company (at the Executive level or higher) as
at 30 June 2021
When GSN share price reaches $0.12 based on
a 20-trading day VWAP.
When GSN share price reaches $0.18 based on
a 20-trading day VWAP.
30-Jun-22
0.015
30-Jun-22
0.003
30-Jun-23
0.002
Tranche 2 was exercised since the end of the financial year with Tranche 1 and Tranche 3 lapsing.
Note B:
As part of the placement undertaken in May 2020 the Company issued Shaw and Partners as corporate advisor
10,000,000 Unlisted Options exercisable at $0.06 each on or before 4 September 2022. 5,000,000 of the Unlisted
Options were exercised during the period.
No Unlisted Options have been issued to Directors during or since the end of the period. The Unlisted Options
do not entitle the holder to participate in any share issue of the Company.
17
DIRECTORS’ REPORT
Unlisted Options (continued)
Note C:
The following tranches of Unlisted Options have been issued since the end of the financial year.
Unlisted Options
Tranche
No.
Exercise
Price
Vesting Condition
Expiry Date
Head of Exploration -
Western Australia
(issued 10 July 2020)
Head of Exploration –
Queensland
(issued 2 September 2020)
Chief Executive Officer
(issued 2 September 2020)
1
2
1
2
1
2
3
600,000
$0.05
600,000
$0.05
1,000,000
$0.10
1,000,000
$0.20
Employee remains with
Company as at 30 June
2021.
Employee remains with
Company as at 30 June
2022.
Employee remains with
Company as at 30 June
2022.
Vest on discovery and
resource development
of a 500,000-ounce gold
equivalent prospect
withing the Queensland
project portfolio.
30-Jun-22
30-Jun-23
30-Jun-23
30-Jun-25
500,000
$0.10
Vest after 12 months of
service
30-Jun-23
500,000
$0.15
Vest after 24 months of
service
30-Jun-24
500,000
$0.20
Vest after 36 months of
service
30-Jun-25
18
DIRECTORS’ REPORT
Performance Rights
Details of Performance Rights issued by the Company during or since the end of the financial year, and ordinary
shares issued as a result of the exercise are:
Performance Rights
Tranche
No.
Exercise
Price
Vesting Condition
Expiry Date
Chief
Officer
September 2020)
Executive
(issued 2
1
2
3
2,000,000
2,000,000
2,000,000
nil
nil
nil
Share price of $0.25 based on
20-trading day VWAP.
Share price of $0.35 based on
20-trading day VWAP.
Share price of $0.45 based on
20-trading day VWAP.
Note 1
Note 1
Note 1
Note 1:
Review of Operations
During the year, the Company carried out exploration
on its tenements with the objective of identifying
economic deposits of gold and other metals. The full
review of operations
immediately precedes this
report.
Operating results for the year
income
The net result of operations for the year was a
loss after
(2019:
$1,435,517). The Operating and Financial Review,
included in the full review of operations, can be
found immediately preceding this Directors’ Report.
tax of $1,878,291
Performance Rights are convertible into Shares on a
one for one basis for no consideration upon exercise
by the holder on or before the date which is 2 years
after issue. Performance Rights are convertible into
Shares on a one for one basis for no consideration
upon exercise by the holder on or before the date
which is 2 years after issue
Dividends
No dividends were declared since the start of the
financial year and the Directors do not recommend the
payment of a dividend in respect of the financial year.
Principal Activities
The principal activity of the Company during the
year was exploration for and evaluation of economic
in
deposits
Western Australia and Queensland.
and other minerals
for gold
19
DIRECTORS’ REPORT
Significant changes in the state of affairs
During the year, the following changes occurred:
Strategic Acquisitions
As announced by the Company on 5 June 2019, the Company entered into an agreement with a third party for the
purchase of the Cox’s Find Gold Project. The Company has paid the vendor a total of $200,000 to date in relation
to the acquisition. Additional consideration to be paid includes the following:
•
•
•
Pay an amount of $800,000 to the vendor within 12 months from the date of completion of the transaction
(Deferred Payment 1). This has now been extended to 23 August 2021 and in consideration for this
extension, a payment of $100,000 was made to the Vendor in May 2020.
Pay an amount of $1,000,000, or issue shares to the value of $1,000,000, to the vendor on declaration of
a mineral resource of 500,000 ounces of gold (Deferred Payment 2);
Pay a 1.5% net smelter return royalty (NSR) on all gold extracted and recovered.
Issue of securities during the period:
Fully Paid Ordinary Shares issued during the period and up until the date of this report.
Movement in issued shares for the period
Date
No.
$
Balance at beginning of the financial year
303,412,338
23,611,759
Issued for cash
Exercise of Unlisted Options
Placement
Cleansing Prospectus
Placement
Exercise of Listed Options
Exercise of Unlisted Options
Non-cash
20-Sep-19
25-Oct-19
01-Apr-20
300,000
6,000
27,000,000
1,215,000
100
4
08-May-20
70,000,000
3,150,000
05-Jun-20
11-Jun-20
133,334
5,000,000
6,667
300,000
Issue of Shares to senior advisor on cancellation of
Unlisted Options
16-Oct-19
1,000,000
Securities issued under Long Term Incentive Plan (LTIP)
05-Nov-19
1,450,000
60,000
80,910
Cancellation of Shares issued to senior advisor, approved
at meeting held 27 November 2019
27-Nov-19
(1,000,000)
(60,000)
Issue of Shares to advisers
10-Mar-20
800,000
20,400
Share issue costs
Total on issue at Balance Date
Issued post balance date
Exercise of Unlisted Options
Total on issue
20
-
(278,100)
408,095,772
28,112,640
17-07-20
1,000,000
50,000
409,095,772
28,162,640
DIRECTORS’ REPORT
Listed Options issued during the period and up until the date of this report.
Movement in Listed Options
No.
$
Balance at beginning of the financial year
Issued under Rights Issue
Placement of Shortfall
Placement
05-Sep-19
83,588,449
835,884
25-Oct-19
17,548,997
175,490
25-Oct-19
27,000,000
270,000
Securities issued under Long Term Incentive Plan (LTIP)
05-Nov-19
2,000,000
60,000
Issue of Shares to advisers
Cleansing Prospectus
Exercise of Listed Options
Issued of Listed Options approved at General Meeting
of Shareholders
10-Mar-20
2,000,000
22,667
31-Mar-20
100
1
05-Jun-20
(133,334)
(6,667)
03-Jul-20
20,000,000
-
Total on issue
152,004,212
1,357,375
21
DIRECTORS’ REPORT
Significant events after the reporting date
On 4 August 2020 and 8 September 2020, the
Company announced the results of its successful
drilling programs at the Cox’s Find and Mon Ami Gold
Projects in Laverton, Western Australia.
On 28 July 2020 the Company announced it had lodged
applications over 4 strategic and highly prospective
tenements immediately adjacent to the 100% owned
Cox’s Find Gold Project in Western Australia. GSN has
made applications over the following tenements:
Tenement
Tenement Area km2 (approximate)
E38/3518
P38/4523
P38/4524
P38/4525
50
0.25
0.25
0.40
50.90
On 16 July 2020 the Company announced the results
of the geochemical mapping and sampling program
collected at the Edinburgh Park project in North
Queensland. Around 652 soil samples and 11 rock
chip samples completed on a wide spaced grid. The
geochemical mapping program, the first systematic
gold focused exploration program undertaken in this
area, was completed on a wide spaced (100m x 100m)
grid over highly prospective targets identified from
interpretation of hyperspectral data in conjunction
with reconnaissance geological mapping and aerial
geophysics.
On 2 September 2020 the Company announced the
appointment of Mr Sean Gregory as Chief Executive
Officer and Mr Octavio Garcia as the Head of
Exploration – Queensland. Mr Mark Major resigned as
Chief Operating Officer.
A summary of the unlisted securities issued after the
reporting date is contained in the Significant Changes
in the State of Affairs section (page 18 and 19) of this
Report.
22
The impact of the Coronavirus (COVID-19) pandemic is
ongoing and whilst it has little financial impact on the
Company up to 30 June 2020, it is not practicable to
estimate the potential impact, positive or negative, after
the reporting date. The situation is rapidly developing
imposed by the
and
Australian Government and other countries, such as
maintaining social distancing requirements, quarantine,
travel restrictions and any economic stimulus that may be
provided.
is dependent on measures
Apart from the above, there has not been any other
matter or circumstance that has arisen after the
reporting date that has significantly affected, or may
significantly affect, the operations of the Company, the
results of those operations, or the state of affairs of the
Company in future financial periods.
Likely developments and expected results
The Company will continue to undertake drilling
and
its Western
activities
Australian and Queensland assets.
exploration
on
Environmental legislation
to minimising
exploration
is committed
impacts of
the
The Company
environmental
and
operations of each project with an appropriate focus
placed on compliance with environmental regulation.
No environmental breaches have occurred or have
been notified by any Government agencies during the
year ended 30 June 2020.
its
Indemnification and insurance of Directors and
Officers
for any
The Company has agreed to indemnify all the Directors of
the Company
to another person
(other than the Company or related body corporate)
from their position as Directors of
that may arise
the Company,
arises
the
except where
out of conduct involving a lack of good faith.
liabilities
liability
insuring
During the financial year the Company paid a premium in
the Directors and
respect of a contract
officers of the Company against any liability incurred in
the course of their duties to the extent permitted by the
Corporations Act 2001. The contract of
insurance
prohibits disclosure of the nature of the liability and the
amount of the premium. No liability has arisen under
the indemnity as at the date of this report.
DIRECTORS’ REPORT
Voting and comments made at the Company’s
2019 Annual General Meeting
The Company received more than 97% of “yes”
votes from eligible Shareholders on its remuneration
report for 2019. No specific feedback a t the A GM or
throughout the year was received.
Proceedings on behalf of the Company
No persons have applied for leave pursuant to section
327 of the Corporation Act 2001 to bring, or intervene
in, proceedings on behalf of Great Southern Mining
Limited.
Key Management Personnel
Directors
J. Terpu (Executive Chairman appointed 1 July 2013;
Non-executive Chairman appointed 12 January 2011).
K. Bozanic
(Independent Non-executive Director
appointed 26 April 2018, reappointed 27 November
2019).
A. Caruso
appointed 26 April 2018).
(Independent Non-executive Director
Company Secretary and Chief Financial Officer
M. Petricevic (Company Secretary and CFO, appointed
Auditor Independence and Non-Audit Services
30 April 2018).
Section 307C of the Corporations Act 2001 requires
our auditors, HLB Mann Judd, to provide the Directors
of the Company with an Independence Declaration
in relation to the audit of the financial report.
This Independence Declaration is set out on page
31 and forms part of this Directors’ report for the
year ended 30 June 2020.
Non-Audit Services
Chief Operating Officer
M. Major (appointed 27 February 2020, resigned
2 September 2020).
S. Gregory was appointed Chief Executive Officer
of the Company on 2 September 2020.
No amounts were paid or payable to the auditor for
non-audit services provided during the year.
Details of securities issued under the Company’s
Long-Term Incentive Plan have been noted previously.
Remuneration report (audited)
Remuneration philosophy
This report outlines the remuneration arrangements
in place for the key management personnel (“KMP”)
of the Company for the financial year ended 30 June
2020. KMP’s being defined as those persons having
authority and responsibility for planning, directing and
controlling the major activities of the Company, directly
or indirectly, including any Director (whether executive
or otherwise). The report also includes remuneration
arrangements of the executives in the Company
receiving the higher remuneration. The information
provided in this remuneration report has been audited
as required by Section 308(3C) of the Corporations Act
2001.
The performance of the Company depends upon the
quality of the directors and executives. The philosophy
of the Company in determining remuneration levels is
to:
•
•
•
set competitive remuneration packages to
attract and retain high calibre employees;
link executive rewards to shareholder value
creation; and
establish appropriate, demanding performance
hurdles for variable executive remuneration in
line with the Company’s corporate strategy
and operationally critical matters.
23
DIRECTORS’ REPORT
Remuneration Committee
Great Southern Mining Limited has not established
a Remuneration Committee. The Board of Directors
of the Company
for determining
is responsible
and reviewing compensation arrangements for the
Directors and the executive team.
establish a Board committee, an additional fee would
be paid for each committee on which a Non-executive
Director sits. The payment of additional fees for
serving on a committee recognises the additional time
commitment required by Non-executive Directors who
serve on one or more sub committees. During the
financial year ended 30 June 2020 no such committees
were in place.
The Board of Directors assesses the appropriateness
of the nature and amount of remuneration of Directors
and executives on a periodic basis by reference to
relevant employment market conditions with an
overall objective of ensuring maximum stakeholder
benefit from the retention of a high-quality Board and
executive team.
Remuneration Structure
In accordance with best practice corporate governance,
the structure of non-executive director and executive
remuneration is separate and distinct.
Non-executive Director remuneration
The Board seeks to set aggregate remuneration at a
level that provides the Company with the ability to
attract and retain Directors of the highest calibre, whilst
incurring a cost that is acceptable to shareholders.
The ASX Listing Rules specify that the aggregate
remuneration of Non-executive Directors shall be
determined from time to time by a general meeting.
The latest determination was at a General Meeting,
prior to the Company’s listing on ASX, held on 30
March 2011 when shareholders approved an aggregate
remuneration of $300,000 per year.
The amount of aggregate remuneration sought to be
approved by shareholders and the manner in which it
is apportioned amongst Directors is reviewed annually.
The Board refers to the fees paid to Non-executive
Directors of comparable companies, when undertaking
the annual review process.
Each Non-executive Director receives a fee for being
a Director of the Company. Should the Company
Senior Manager and Executive Director Remuneration
Remuneration consists of fixed remuneration and
variable remuneration (comprising short-term and
long-term incentive schemes).
Fixed Remuneration
Fixed remuneration is reviewed annually by the
Board of Directors. The process consists of a review
of relevant comparative remuneration in the market
and internally and, where appropriate, external advice
on policies and practices. The Board has access to
external, independent advice where necessary.
Senior managers and executive directors are given the
opportunity to receive their fixed (primary) remuneration
in a variety of forms including cash and fringe benefits
such as motor vehicles and expense payment plans. It
is intended that the manner of payment chosen will be
optimal for the recipient without creating undue cost
for the Company.
Variable Remuneration
A long-term incentive (LTI) plan was adopted by
shareholders of the Company at the general meeting
of members held 29 June 2018 and updated 3 July
2020.
During the period, the Company entered agreements
with the Chief Operation Officer, Exploration Managers
and subsequent to reporting date the Chief Executive
Officer which contained the ability to pay short-term
incentives (STI) aligned to the success of operationally
critical matters. The STI was capped at 20% - 40% of
the base salary. No STI was paid to any executives
or Directors during or since the end of the period.
24
DIRECTORS’ REPORT
Service Agreements
Remuneration and other terms of employment for the Executive Directors and other Key Management Personnel
are formalised in a Service Agreement. The major provisions of the agreements relating to remuneration are set
out below:
Employee
Base salary ($) inclusive
of superannuation
Term of
agreement
Notice period
J Terpu
M Major
M Petricevic
S Gregory
219,000
247,744
180,000
290,175
2 years
6 months
Until termination
3 months
2 years
3 months
Until termination
3 months
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N
DIRECTORS’ REPORT
Option plans in existence during the financial year:
On 29 June 2018 the Shareholders of the Company approved the adoption of the Long-Term Incentive Plan (LTIP). An update
was approved by Shareholders of the Company on 3 July 2020.
The following options were issued on 27 February 2020 to key management personnel during the period under the long-term
incentive plan:
0
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Issued to M Major:
Outstanding at 30 June 2019
Granted
Exercised
Outstanding and exercisable at 30 June 2020
The following principal assumptions were used in the valuation:
Number of Options
Option Fair Value $
-
3,000,000
-
3,000,000
-
8,518
-
8,518
Valuation assumptions
Grant date
Share price at date of grant
Volatility
Expiry date
Dividend yield
Risk free investment rate
Vesting probability
Fair value at grant date
Exercise price at date of grant
Exercisable from
27-Feb-20
$ 0.043
84%
Refer below
Nil
0.50%
between 9% and 75%
refer below
$ 0.050
Refer below
The Options issued on 27 February 2020 had a number of market-based vesting conditions. The fair value of each tranche
was determined through the use of a Monte-Carlo option price calculation.
The underlying expected volatility was determined by reference to historical data of the Company’s shares over a period of
time.
27
DIRECTORS’ REPORT
Tranche
Options – no.
Options –
exercise price
Vesting Condition
Expiry
date
Fair value ($)
per option
Tranche 1
1,000,000
$0.05
Executive remains an employee of
the Company (at the Executive level
or higher) as at 30 June 2021
30-Jun-22
0.015
Tranche 2
1,000,000
$0.05
When GSN share price reaches $0.12
based on a 20-trading day VWAP.
30-Jun-22
0.003
Tranche 3
1,000,000
$0.05
When GSN share price reaches $0.18
based on a 20-trading day VWAP.
30-Jun-23
0.002
On 17 July 2020, Tranche 2 vested and 1,000,000 Options were issued and immediately exercised by the holder.
Tranche 1 and Tranche 3 lapsed after reporting date on resignation from the Company.
Options granted to Directors and exercised or lapsed during the year:
Nil options granted or exercised to/by Directors during the period or the prior period.
Movements in KMP share holdings
Fully paid ordinary shares – directly and indirectly held:
2020
J. Terpu
K. Bozanic
A. Caruso
Opening Balance
1 July 2019
Bought
Sold/transferred
Closing Balance
30 June 2020
117,309,351
9,000,000
(1,000,000)
1,200,000
1,200,000
-
-
-
-
125,309,351
1,200,000
1,200,000
The 1,000,000 transferred above was undertaken off-market. All other shares were acquired on market.
28
DIRECTORS’ REPORT
Listed Options – directly or indirectly held:
2020
J. Terpu
K. Bozanic
A. Caruso
Opening Balance
1 July 2019
Bought
Sold
Closing Balance
30 June 2020
-
-
-
39,103,118
400,000
400,000
-
-
-
39,103,118
400,000
400,000
Transactions with Key Management Personnel
The following comprises amounts paid or payable and received or receivable applicable to entities in which
KMP have an interest.
Directors and related parties
Paid/payable to:
Note
2020
$
2019
$
Rent and service charges paid to Ruby Lane Pty Ltd atf the Terpu Trust
10,000,000 Fully paid ordinary shares issued to Valleyrose Pty Ltd
in satisfaction for the $300,000 loan provided to the Company in
December 2018.
Mon Ami acquisition - April 2018 – unpaid at 30 June 2019, paid during
FY2020
Amounts owing to related parties at balance date:
J Terpu (as Director of Chellingtons Pty Ltd atf Red Star Trust) for
administration services)
Mon Ami acquisition - April 2018
Loan provided by Valleyrose Pty Ltd in July 2019 (a)
Interest charges on loan provided by Valleyrose Pty Ltd in July 2019
18
16
12
12
13
(a)
76,371
79,294
-
300,000
150,000
-
-
-
8,630
150,000
500,000
41,549
-
-
(a) Loan provided by Director related entity on 31 July 2019. Interest is payable on commercial terms. Subsequent
to balance date, $200,000 has been repaid.
End of Remuneration Report
29
DIRECTORS’ REPORT
Signed in accordance with a resolution of the Directors.
........................................................................................
John Terpu
Executive Chairman
Perth WA
26 September 2020
30
AUDITOR’S INDEPENDENCE DECLARATION
As lead auditor for the audit of the financial report of Great Southern Mining Limited for the year
ended 30 June 2020, I declare that to the best of my knowledge and belief, there have been no
contraventions of:
a)
the auditor independence requirements of the Corporations Act 2001 in relation to the
audit; and
b)
any applicable code of professional conduct in relation to the audit.
Perth, Western Australia
26 September 2020
M R Ohm
Partner
31
CORPORATE GOVERNANCE STATEMENT
The Board is committed to achieving and demonstrating the highest standards of corporate governance. As such,
Great Southern Mining Limited (the “Company”) has adopted the fourth edition of the Corporate Governance
Principles and Recommendations which was released by the ASX Corporate Governance Council and became
effective for the financial years beginning on or after 1 January 2020.
The Company’s Corporate Governance Statement for the financial year ended 30 June 2020 was approved by the
Board on 23 September 2020. The Corporate Governance Statement is available on the Company’s website at
www.gsml.com.au.
32
STATEMENT OF PROFIT OR LOSS AND OTHER
COMPREHENSIVE INCOME
FOR THE YEAR ENDED 30 JUNE 2020
Revenue and other income
Expenses
Administration expenses
Consulting fees
Directors benefits
Employee benefits expense
Legal fees
Marketing fees
Interest expense
Depreciation expense
Impairment of exploration expenditure
Exploration and evaluation expenditure not capitalised
Share Based Payment expense
Total expenses
Loss before income tax expense
Income tax expense
Net loss for the year
Other comprehensive income, net of income tax
Items that may be reclassified to profit or loss
Net loss on equity instruments designated at fair value through
other comprehensive income
Income tax expense
Notes
2
2
2
11
2
4
2020
$
2019
$
1,341
3,156
(313,833)
(382,141)
(97,774)
(77,193)
(295,650)
(306,052)
(255,737)
(240,120)
(127,705)
(109,830)
(145,742)
(46,984)
(51,607)
(74,379)
-
(5,295)
-
(146,471)
(242,605)
(274,601)
(78,830)
(45,756)
(1,879,632)
(1,438,673)
(1,878,291)
(1,435,517)
-
-
(1,878,291)
(1,435,517)
-
-
(25,729)
-
Total comprehensive (loss)/income for the year
(1,878,291)
(1,461,246)
Basic and diluted loss per share (cents per share)
5
(0.563)
(0.509)
The accompanying notes form part of these financial statements.
33
STATEMENT OF FINANCIAL POSITION
AS AT 30 JUNE 2020
CURRENT ASSETS
Cash and cash equivalents
Other assets
Total Current Assets
NON-CURRENT ASSETS
Other receivables – non-current
Plant and equipment
Right of Use Asset
Exploration and evaluation expenditure
Total Non-Current Assets
TOTAL ASSETS
CURRENT LIABILITIES
Trade and other payables
Borrowings
Lease liability
Employee benefits
Total Current Liabilities
NON-CURRENT LIABILITIES
Borrowings
Deferred consideration
Lease liability
Total Non-Current Liabilities
TOTAL LIABILITIES
NET ASSETS
EQUITY
Issued capital
Reserves
Accumulated losses
TOTAL EQUITY
The accompanying notes form part of these financial statements.
34
Notes
2020
$
2019
$
6
7
8
10
23A
11
12
13
23B
15
13
14
23B
16
17
3,067,264
65,401
208,044
31,409
3,132,665
239,453
13,500
84,551
222,124
12,500
14,913
-
7,187,818
4,363,187
7,507,993
4,390,600
10,640,658
4,630,053
662,614
511,691
52,887
94,984
523,837
-
-
78,172
1,322,176
602,009
64,239
800,000
171,634
1,035,873
-
-
-
-
2,358,049
602,009
8,282,609
4,028,045
28,112,640
23,611,759
1,631,975
80,756
(21,462,007)
(19,664,470)
8,282,609
4,028,045
STATEMENT OF CASH FLOWS
FOR THE YEAR ENDED 30 JUNE 2020
Notes
2020
$
2019
$
CASH FLOWS FROM OPERATING ACTIVITIES
Payments to suppliers and employees
(1,276,627)
(1,422,891)
Interest received
Interest paid
1,341
(41,549)
3,156
-
NET CASH USED IN OPERATING ACTIVITIES
22
(1,316,835)
(1,419,735)
CASH FLOWS FROM INVESTING ACTIVITIES
Payments for plant and equipment
(30,637)
-
Payments for exploration and evaluation expenditure
(1,817,587)
(1,101,775)
Proceeds from sale of financial assets
NET CASH USED IN INVESTING ACTIVITIES
-
(1,848,224)
154,721
(947,054)
CASH FLOWS FROM FINANCING ACTIVITIES
Proceeds from issue of shares and listed options (net
of costs)
Payment of amount owing to Director related entity
Proceeds from Director Loan
5,674,279
1,526,410
(150,000)
500,000
-
300,000
NET CASH PROVIDED BY FINANCING ACTIVITIES
6,024,279
1,826,410
Net increase/(decrease) in cash held
Cash at beginning of year
2,859,220
208,044
(540,379)
748,423
CASH AT END OF YEAR
6
3,067,264
208,044
The accompanying notes form part of these financial statements.
35
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s
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 JUNE 2020
NOTE
ACCOUNTING POLICIES
1:
STATEMENT OF
SIGNIFICANT
(a)
(b)
(c)
Reporting entity
Y our Directors present their report on the
Company for the financial year ended 30 June
2020. The Company is a listed public company
registered in Australia. The principal activities
are the exploration for and evaluation of
economic deposits for gold and other minerals
in North Queensland and Western Australia.
The address of the Company’s registered
office is Suite 4, 213 Balcatta Rd, Balcatta
WA 6021.
Basis of preparation and statement of
compliance
financial statements
The general-purpose
the Company have been prepared
of
in accordance with the requirements of
the Corporations Act 2001, Australian
Accounting Standards and other authoritative
pronouncements of the Australian Accounting
Standards Board (AASB). Compliance with
Australian Accounting Standards results in full
compliance with the International Financial
Reporting Standards (IFRS) as issued by the
International Accounting Standards Board
(IASB). Great Southern Mining Limited is a for-
profit entity for the purpose of preparing the
financial statements
The accounting policies detailed below have
been consistently applied to all of the years
presented unless otherwise stated.
The financial report is presented in Australian
dollars.
The financial statements for the year ended
30 June 2020 were approved and authorised
for
issue by the Board of Directors on
26 September 2020.
Adoption of new and revised standards
Changes
in accounting policies on
initial
application of Accounting Standards
The Company has adopted all of the new and
revised Standards and Interpretations issued
by the Australian Accounting Standards Board
(AASB) that are relevant to its operations and
effective for the accounting period beginning
on or after 1 January 2019. A summary of
which is included below:
AASB 16 Leases replaces AASB 117
Leases and related interpretations.
AASB 16 removes the classification of leases
as either operating leases or finance leases –
for the lessee – effectively treating all leases as
finance leases. Most leases will be capitalised
on the statement of financial position by
recognising a lease liability for the present value
obligation and a ‘right of use’ asset. The right
of use asset is calculated based on the lease
liability plus initial direct costs, prepaid lease
payments and estimated restoration costs less
lease incentives received. This will result in an
increase in the recognised assets and liabilities
in the statement of financial p osition a s w ell
as a change in the expense recognition with
interest and depreciation replacing operating
lease expense. There are exemptions for short-
term leases and leases of low-value items.
AASB 16 is effective from annual reporting
periods beginning on or after 1 January 2019.
The Company has applied AASB 16 from 1
July 2019 using the modified retrospective
approach, with no restatement of comparative
information.
impact on the accounting policies,
The
financial performance and financial position of
the Company from the adoption of AASB 16 is
detailed in Note 23.
Changes in accounting policies on initial
application of Accounting Standards
New Accounting Standards and
Interpretations not yet mandatory or early
adopted
Standards
Australian Accounting
and
Interpretations that have recently been issued
or amended but are not yet mandatory, have
not been early adopted by the consolidated
entity for the annual reporting period ended
37
STATEMENT OF SIGNIFICANT ACCOUNTING POLICIES
(CONTINUED)
impact of
30 June 2020. The Company’s assessment of
these new or amended
the
Accounting Standards and
Interpretations,
most relevant to the Company, are set out
below.
Conceptual Framework for Financial Reporting
(Conceptual Framework)
to
annual
revised Conceptual
contains new definition
Framework
is
The
applicable
reporting periods
beginning on or after 1 January 2020 and
early adoption is permitted. The Conceptual
Framework
and
recognition criteria as well as new guidance on
measurement that affects several Accounting
Standards. Where the Company has relied
on the existing framework in determining its
accounting policies for transactions, events or
conditions that are not otherwise dealt with
under the Australian Accounting Standards,
the Company may need to review such policies
under the revised framework. At this time, the
application of the Conceptual Framework is
not expected to have a material impact on the
Company’s financial statements.
(d)
Critical accounting estimates and judgements
application of
The
accounting policies
requires the use of judgements, estimates and
assumptions about carrying values of assets
and liabilities that are not readily apparent from
other sources. The estimates and associated
assumptions are based on historical experience
and other factors that are considered to be
relevant. Actual results may differ from these
estimates.
The estimates and underlying assumptions are
reviewed on an ongoing basis. Revisions are
recognised in the period in which the estimate is
revised if it affects only that period, or in the
period of the revision and future periods if the
revision affects both current and
future
periods.
38
Exploration and evaluation expenditure carried
forward
In accordance with accounting policy Note
1 (r), management determines when an area
of interest should be abandoned. When a
decision is made that an area of interest is
not commercially viable, all costs that have
been capitalised in respect of that area of
interest are written off. In determining this,
assumptions including the maintenance of
title, ongoing expenditure and prospectivity
are made. During the year, no amounts were
written off. Refer to Note 11 for disclosure of
carrying values.
Recovery of deferred tax assets
Deferred
tax assets are currently not
recognised in the financial statements. The
extent to which deferred tax assets can be
recognised is based on an assessment of the
probability of the Company’s future taxable
income against which the deferred tax assets
can be utilised. Given the current stage of
the Company’s exploration and development
cycle, the likelihood and timeline of future
taxable income cannot be reliably estimated.
Refer to Note 4.
Share based payments
instruments
The Company measures the cost of equity-
settled
transactions with employees by
reference to the fair value of the equity
instruments at the date at which they are
issued
granted. For security
to consultants, consideration of the
fair
value of services received (if available) or
fair value of the equity instruments granted
as consideration is used. The fair value is
determined by using the Black-Scholes model
taking into account the terms and conditions
upon which the instruments were granted. The
accounting estimates and assumptions relating
to equity-settled share-based payments would
have no impact on the carrying amounts of
assets and liabilities within the next annual
reporting period but may impact profit or loss
and equity. Refer to Note 17.
STATEMENT OF SIGNIFICANT ACCOUNTING POLICIES
(CONTINUED)
Leases
The adoption of AASB 16 and impacts of
estimates and assumptions is detailed in
Note 23.
(e)
Segment reporting
Operating segments are reported in a manner
consistent with the internal reporting provided
to the chief operating decision maker. The chief
operating decision maker, who is responsible
for allocating
resources and assessing
performance of the operating segments, has
been identified as the Board of Great Southern
Mining Limited. The Company’s activities
included the exploration and evaluation of
projects in North Queensland and Western
Australia.
In addition, corporate assets which are not
directly attributable to the business activities
of the operating segment are not allocated
to a segment. In the financial periods under
audit, this primarily applies to the Company’s
registered
administrative
duties.
office
and
There have been no changes from prior
periods in the measurement methods used
to determine reported segment profit or loss
apart from impacts of adoption of AASB 16.
Refer Note 1(c).
f)
Revenue recognition
Revenue is measured at fair value of the
consideration received or receivable. Revenue
is recognised to the extent that it is probable
that the economic benefits will flow to the
Company and the revenue can be reliably
measured. The following specific recognition
criteria must also be met before revenue is
recognised:
Interest income
Interest revenue is recognised on a time
proportionate basis that takes into account the
effective yield on the financial asset.
(g)
Income tax
The income tax expense or benefit for the
period is the tax payable on the current
the
period’s
income based on
taxable
applicable income tax rate for each jurisdiction
adjusted by changes in deferred tax assets and
liabilities attributable to temporary difference
and to unused tax losses.
The current income tax charge is calculated
on the basis of the tax laws enacted or
substantively enacted at the end of the
reporting period in the countries where the
company operates and generates taxable
income. Management periodically evaluates
positions taken in tax returns with respect to
situations in which applicable tax regulation
is subject to interpretation. It establishes
provisions where appropriate on the basis
of amounts expected to be paid to the tax
authorities.
Current tax assets and liabilities for the current
and prior periods are measured at the amount
expected to be recovered from or paid to the
taxation authorities. The tax rates and tax laws
used to compute the amount are those that
are enacted or substantively enacted by the
reporting date.
income tax
Deferred
is provided on all
temporary differences at the reporting date
between the tax bases of assets and liabilities
and their carrying amounts
for financial
reporting purposes.
Deferred income tax liabilities are recognised
for all taxable temporary differences except:
• when the deferred income tax liability arises
from the initial recognition of goodwill or of
an asset or liability in a transaction that is
not a business combination and that, at the
time of the transaction, affects neither the
accounting profit nor taxable profit or loss;
or
• when the taxable temporary difference is
associated with investments in subsidiaries,
associates or interests in joint ventures, and
the timing of the reversal of the temporary
difference can be controlled and it is probable
that the temporary difference will not reverse
in the foreseeable future.
Deferred income tax assets are recognised for
all deductible temporary differences, carry-
forward of unused tax assets and unused tax
39
STATEMENT OF SIGNIFICANT ACCOUNTING POLICIES
(CONTINUED)
losses, to the extent that it is probable that
taxable profit will be available against which
the deductible temporary differences and the
carry-forward of unused tax credits and unused
tax losses can be utilised, except:
• when the deferred income tax asset relating
to the deductible temporary difference
arises from the initial recognition of an
asset or liability in a transaction that is not a
business combination and, at the time of the
transaction, affects neither the accounting
profit nor taxable profit or loss; or
• when the deductible temporary difference
is associated with investments in associates
or interests in joint ventures, in which case a
deferred tax asset is only recognised to the
extent that it is probable that the temporary
difference will reverse in the foreseeable
future and taxable profit will be available
against which the temporary difference can
be utilised.
The carrying amount of deferred income tax
assets is reviewed at each reporting date
and reduced to the extent that it is no longer
probable that sufficient taxable income will be
available to allow all or part of the deferred
income tax asset to be utilised.
Unrecognised deferred income tax assets are
reassessed at each reporting date and are
recognised to the extent that it has become
probable that future taxable profit will allow
the deferred tax asset to be recovered.
Deferred income tax assets and liabilities are
measured at the tax rates that are expected
to apply to the year when the asset is realised,
or the liability is settled, based on tax rates
(and tax laws) that have been enacted or
substantively enacted at the reporting date.
Income taxes relating to items recognised
directly in equity are recognised in equity and
not in profit or loss.
Deferred tax assets and deferred tax liabilities
are offset only if a legally enforceable right
exists to set off current tax assets against
current tax liabilities and the deferred tax
assets and liabilities relate to the same taxable
entity and the same taxation authority.
(h)
Other taxes
Revenues, expenses and assets are recognised
net of the amount of GST except:
• when the GST incurred on a purchase of
goods and services is not recoverable from
the taxation authority, in which case the GST
is recognised as part of the cost of acquisition
of the asset or as part of the expense item as
applicable; and
• receivables and payables, which are stated
with the amount of GST included.
The net amount of GST recoverable from, or
payable to, the taxation authority is included
as part of receivables or payables in the
statement of financial position.
Cash flows are included in the statement
of cash flows on a gross basis and the GST
component of cash flows arising from investing
and financing activities, which is recoverable
from, or payable to, the taxation authority are
classified as operating cash flows.
Commitments and contingencies are disclosed
net of the amount of GST recoverable from, or
payable to, the taxation authority.
(i)
Impairment of assets
The Company assesses at each reporting date
whether there is an indication that an asset
may be impaired. If any such indication exists,
or when annual impairment testing for an asset
is required, the Company makes an estimate
of the asset’s recoverable amount. An asset’s
recoverable amount is the higher of its fair
value less costs to sell and its value-in-use and
is determined for an individual asset, unless
the asset does not generate cash inflows that
are largely independent of those from other
assets or groups of assets and the asset’s
value-in-use cannot be estimated to be close
to its fair value. In such cases the asset is tested
for impairment as part of the cash-generating
unit to which it belongs. When the carrying
amount of an asset or cash-generating unit
exceeds its recoverable amount, the asset or
cash-generating unit is considered impaired
and is written down to its recoverable amount.
40
STATEMENT OF SIGNIFICANT ACCOUNTING POLICIES
(CONTINUED)
Impairment of assets (continued)
(k)
Trade and other receivables
In assessing value-in-use, the estimated future
cash flows are discounted to their present
value using a pre-tax discount rate that reflects
current market assessments of the time value
of money and the risks specific to the asset.
Impairment
losses relating to continuing
operations are recognised in those expense
categories consistent with the function of the
impaired asset unless the asset is carried at
revalued amount (in which case the impairment
loss is treated as a revaluation decrease).
An assessment is also made at each reporting
date as to whether there is any indication that
previously recognised impairment losses may
no longer exist or may have decreased. If such
indication exists, the recoverable amount is
estimated. A previously recognised impairment
loss is reversed only if there has been a change
in the estimates used to determine the asset’s
recoverable amount since the last impairment
loss was recognised. If that is the case the
carrying amount of the asset is increased to its
recoverable amount. That increased amount
cannot exceed the carrying amount that would
have been determined, net of depreciation,
had no impairment loss been recognised for the
asset in prior years. Such reversal is recognised
in profit or loss unless the asset is carried at
revalued amount, in which case the reversal is
treated as a revaluation increase. After such a
reversal the depreciation charge is adjusted in
future periods to allocate the asset’s revised
carrying amount, less any residual value, on a
systematic basis over its remaining useful life.
(j)
Cash and cash equivalents
Cash comprises cash at bank and in hand.
Cash equivalents are short term, highly liquid
investments that are readily convertible to
known amounts of cash and which are subject
to an insignificant r isk of changes i n value.
Bank overdrafts are shown within borrowings
in current liabilities in the statement of financial
position.
For the purposes of the statement of cash
flows, cash and cash equivalents consist of
cash and cash equivalents as defined above,
net of outstanding bank overdrafts.
Trade receivables are measured on initial
recognition at fair value and are subsequently
measured at amortised cost using the effective
interest rate method, less any allowance for
impairment for expected credit losses. Trade
receivables are generally due for settlement
within periods ranging from 15 days to 30
days.
Impairment of trade receivables is continually
reviewed and those that are considered to
be uncollectible are written off by reducing
the carrying amount directly. An allowance
account is used when there is objective
evidence that the Company will not be able
to collect all amounts due according to the
original contractual terms. Factors considered
by the Company in making this determination
include known significant financial difficulties of
the debtor, review of financial information and
significant delinquency in making contractual
payments to the Company. The impairment
allowance is set equal to the difference
between the carrying amount of the receivable
and the present value of estimated future cash
flows, discounted at the original effective
interest rate. Where receivables are short-term
discounting is not applied in determining the
allowance.
loss
impairment
The amount of the
is
recognised in the statement of comprehensive
income within other expenses. When a trade
receivable for which an impairment allowance
had been recognised becomes uncollectible in
a subsequent period, it is written off against
the allowance account. Subsequent recoveries
of amounts previously written off are credited
against other expenses in the statement of
comprehensive income.
41
STATEMENT OF SIGNIFICANT ACCOUNTING POLICIES
(CONTINUED)
(l)
Financial Instruments
Recognition and derecognition
Financial assets and financial liabilities are
recognised when the Company becomes
a party to the contractual provisions of the
financial
instrument. Financial assets are
derecognised when the contractual rights to
the cash flows from the financial asset expire,
or when the financial asset and substantially
all the risks and rewards are transferred. A
financial liability is derecognised when it is
extinguished, discharged, cancelled or expires.
Classification and
financial assets
initial measurement of
Except for those trade receivables that do
not contain a significant financing component
and are measured at the transaction price in
accordance with IFRS 15, all financial assets
are initially measured at fair value adjusted for
transaction costs (where applicable). Financial
assets, other than those designated and
effective as hedging instruments, are classified
into the following categories:
• amortised cost
• fair value through profit or loss (FVTPL)
• fair value through other comprehensive
income (FVOCI).
In the periods presented the Company has
financial assets categorised as FVOCI.
The classification is determined by both:
• the entity’s business model for managing
the financial asset
• the contractual cash flow characteristics of
the financial asset.
Subsequent measurement of financial assets
Financial assets at fair value through other
comprehensive income (FVOCI)
The Company accounts for financial assets
at FVOCI if the assets meet the following
conditions:
• they are held under a business model
whose objective it is “hold to collect” the
associated cash flows and sell; and
42
• the contractual terms of the financial
assets give rise to cash flows that are solely
payments of principal and interest on the
principal amount outstanding.
losses recognised
Any gains or
comprehensive
income
recycled upon derecognition of the asset.
in other
(OCI) will not be
Classification and measurement of financial
liabilities
The Company's
include
financial
borrowings, trade and other payables. The
Company does not have any derivative
financial instruments in any period presented.
liabilities
Financial liabilities are initially measured at
fair value, and, where applicable, adjusted
for transaction costs unless the Company
designated a financial liability at fair value
through profit or loss.
Subsequently, financial liabilities are measured
at amortised cost using the effective interest
method except for derivatives and financial
liabilities designated at FVTPL, which are
carried subsequently at fair value with gains
or losses recognised in profit or loss (other
than derivative
that
financial
are designated and effective as hedging
charges
instruments). All
and, if applicable, changes in an instrument’s
fair value that are reported in profit or loss
are included within finance costs or finance
income.
interest-related
instruments
(m)
Plant and equipment
impairment
is stated at cost
Plant and equipment
less accumulated depreciation and any
accumulated
losses. Such cost
includes the cost of replacing parts that are
eligible for capitalisation when the cost of
replacing the parts is incurred. Similarly, when
each major inspection is performed, its cost is
recognised in the carrying amount of the plant
and equipment as a replacement only if it is
eligible for capitalisation.
Depreciation is calculated on a straight-line
basis over the estimated useful life of the
assets as follows:
STATEMENT OF SIGNIFICANT ACCOUNTING POLICIES
(CONTINUED)
Plant and equipment – over 3 to 5 years
(n)
Trade and other payables
Motor Vehicles – over 3 years
The assets’ residual values, useful lives and
amortisation methods are reviewed, and
adjusted if appropriate, at each financial year
end.
(i) Impairment
for
reviewed
The carrying values of plant and equipment
are
impairment at each
reporting date, with recoverable amount
being estimated when events or changes in
circumstances indicate that the carrying value
may be impaired.
The
recoverable amount of plant and
equipment is the higher of fair value less costs
to sell and value in use. In assessing value
in use, the estimated future cash flows are
discounted to their present value using a pre-
tax discount rate that reflects current market
assessments of the time value of money and
the risks specific to the asset.
For an asset that does not generate largely
independent cash inflows, recoverable amount
is determined for the cash-generating unit to
which the asset belongs, unless the asset’s
value in use can be estimated to approximate
fair value.
An impairment exists when the carrying value
of an asset or cash-generating units exceeds
its estimated recoverable amount. The asset or
cash-generating unit is then written down to
its recoverable amount.
For plant and equipment, impairment losses are
recognised in the statement of comprehensive
income in a separate line item.
(ii) Derecognition and disposal
An item of plant and equipment is derecognised
upon disposal or when no further future
economic benefits are expected from its use
or disposal.
Any gain or loss arising on derecognition of
the asset (calculated as the difference between
the net disposal proceeds and the carrying
amount of the asset) is included in profit or loss
in the year the asset is derecognised.
Trade payables and other payables are carried
at amortised cost and represent liabilities for
goods and services provided to the Company
prior to the end of the financial year that are
unpaid and arise when the Company becomes
obliged to make future payments in respect
of the purchase of these goods and services.
Trade and other payables are presented as
current liabilities unless payment is not due
within 12 months.
(o)
Employee leave benefits
Wages, salaries, annual leave and sick leave
Liabilities for wages and salaries, including
non-monetary benefits, annual
leave and
accumulating sick leave expected to be settled
within 12 months of the reporting date are
recognised in other payables or in employee
benefits, in respect of employees’ services
up to the reporting date. They are measured
at the amounts expected to be paid when
the liabilities are settled. Liabilities for non-
accumulating sick leave are recognised when
the leave is taken and are measured at the
rates paid or payable.
Other long-term employee benefits
The Company’s liabilities for annual leave and
long service leave are included in other long-
term benefits as they are not expected to be
settled wholly within 12 months after the end
of the period in which the employees render
the related service. They are measured at the
present value of the expected future payments
to be made to employees. The expected future
payments incorporate anticipated future wage
and salary levels, experience of employee
departures and periods of service, and are
discounted at rates determined by reference
to market yields at the end of the reporting
period on high quality corporate bonds that
have maturity dates that approximate the
timing of the estimated future cash outflows.
Any re-measurements arising from experience
adjustments and changes in assumptions are
recognised in profit or loss in the periods in
which the changes occur.
43
STATEMENT OF SIGNIFICANT ACCOUNTING POLICIES
(CONTINUED)
liabilities
The Company presents employee benefit
obligations as current
the
statement of financial position if the Company
does not have an unconditional right to defer
settlement for at least 12 months after the
reporting period, irrespective of when the
actual settlement is expected to take place.
in
(p)
Issued capital
Ordinary shares are classified as equity.
Incremental costs directly attributable to the
issue of new shares or options are shown
in equity as a deduction, net of tax, from
the proceeds. Incremental costs directly
attributable to the issue of new shares or
options for the acquisition of a new business
are not included in the cost of acquisition as
part of the purchase consideration.
(q)
Earnings per share
Basic earnings per share is calculated as net
profit/loss adjusted to exclude any costs of
servicing equity (other than dividends) and
preference share dividends, divided by the
weighted average number of ordinary shares,
adjusted for any bonus element.
Diluted earnings per share is calculated as net
profit/loss adjusted for:
• costs of servicing equity
(other
than
dividends) and preference share dividends;
• the after-tax effect of dividends and interest
associated with dilutive potential ordinary
recognised as
shares
expenses; and
that have been
• other non-discretionary changes in revenues
or expenses during the period that would
result from the dilution of potential ordinary
shares; divided by the weighted average
number of ordinary shares and dilutive
potential ordinary shares, adjusted for any
bonus element.
44
(r)
Exploration and evaluation expenditure
Exploration and evaluation expenditure in
relation to each separate area of interest are
recognised as an exploration and evaluation
asset in the year in which they are incurred
where the following conditions are satisfied:
(i) the rights to tenure of the area of interest
are current; and
(ii)
at least one of the following conditions is
also met:
(a) the exploration and evaluation
expenditures are expected
to
be recouped through successful
development and exploitation of
the area of interest, or alternatively,
by its sale; or
(b) exploration and evaluation activities
in the area of interest have not
at the reporting date reached a
stage which permits a reasonable
assessment of
the existence
or otherwise of economically
recoverable reserves, and active
and significant operations in, or in
relation to, the area of interest are
continuing.
Exploration and evaluation assets are initially
measured at cost and include acquisition of
rights to explore, studies, exploratory drilling,
trenching and sampling and associated
activities and an allocation of depreciation and
amortised of assets used in exploration and
evaluation activities. General and administrative
costs are only included in the measurement of
exploration and evaluation costs where they
are related directly to operational activities in
a particular area of interest.
Exploration and evaluation assets are assessed
for impairment when facts and circumstances
suggest that the carrying amount of an
exploration and evaluation asset may exceed its
recoverable amount. The recoverable amount
of the exploration and evaluation asset (for the
cash generating unit(s) to which it has been
allocated being no larger than the relevant
area of interest) is estimated to determine the
extent of the impairment loss (if any). Where
STATEMENT OF SIGNIFICANT ACCOUNTING POLICIES
(CONTINUED)
an impairment loss subsequently reverses, the
carrying amount of the asset is increased to
the revised estimate of its recoverable amount,
but only to the extent that the increased
carrying amount does not exceed the carrying
amount that would have been determined had
no impairment loss been recognised for the
asset in previous years.
Where a decision has been made to proceed
with development in respect of a particular
area of interest, the relevant exploration and
evaluation asset is tested for impairment and
the balance is then reclassified to development.
(s)
Share-Based payments
The Company operates equity-settled share-
based remuneration plans for its employees.
None of the Company’s plans feature any
options for a cash settlement.
All goods and services received in exchange
for the grant of any share-based payment are
measured at their fair values. Where employees
are rewarded using share-based payments,
the fair values of employees’ services are
determined indirectly by reference to the fair
value of the equity instruments granted. This
fair value is appraised at the grant date.
All share-based remuneration is ultimately
recognised as an expense in profit or loss with
a corresponding credit to the share option
reserve. If vesting periods or other vesting
conditions apply, the expense is allocated over
the vesting period, based on the best available
estimate of the number of share options
expected to vest.
Non-market vesting conditions are included
in assumptions about the number of options
that are expected to become exercisable.
Estimates are subsequently revised if there
is any indication that the number of share
options expected to vest differs from previous
estimates. Any cumulative adjustment prior to
vesting is recognised in the current period. No
adjustment is made to any expense recognised
in prior periods if share options ultimately
exercised are different to that estimated on
vesting.
share options,
Upon exercise of
the
proceeds received net of any directly
attributable
transaction costs are allocated
to share capital.
(t)
Provisions,
contingent assets
contingent
liabilities
and
Provisions are recognised when the Company
has a present legal or constructive obligation
as a result of a past event, it is probable that
an outflow of economic resources will be
required from the Company and amounts can
be estimated reliably. The timing or amount of
the outflow may still be uncertain.
Restructuring provisions are recognised only
if a detailed formal plan for the restructuring
has been developed and implemented, or
management has at least announced the plan’s
main features to those affected by it. Provisions
are not recognised for future operating losses.
the most
Provisions are measured at the estimated
expenditure required to settle the present
obligation, based on
reliable
evidence available at the reporting date,
including the risks and uncertainties associated
with the present obligation. Where there
are a number of similar obligations, the
likelihood that an outflow will be required in
settlement is determined by considering the
class of obligations as a whole. Provisions are
discounted to their present values, where the
time value of money is material.
Any reimbursement that the Company can be
virtually certain to collect from a third party
with respect to the obligation is recognised as
a separate asset. However, this asset may not
exceed the amount of the related provision.
No liability is recognised if an outflow of
economic resources as a result of present
obligation is not probable. Such situations are
disclosed as contingent liabilities, unless the
outflow of resources is remote in which case
no liability is recognised.
45
STATEMENT OF SIGNIFICANT ACCOUNTING POLICIES
The Company has elected not to recognise a right-of-
use asset and corresponding lease liability for short-
term leases with terms of 12 months or less and leases
of low-value assets. Lease payments on these assets
are expensed to profit or loss as incurred.
Lease Liabilities
is
the
lease
readily
liability
borrowing
recognised
determined,
at
lease. The
the
A
commencement date of a
lease
liability is initially recognised at the present value
lease payments to be made over the
of the
interest
term of the lease, discounted using the
rate implicit in the lease or, if that rate cannot
be
Company’s
Lease payments
incremental
lease
less any
comprise of
incentives receivable, variable lease payments that
depend on an index or a rate, amounts expected
to be paid under
residual value guarantees,
exercise price of a purchase option when the
exercise of the option is reasonably certain to occur,
and any anticipated termination penalties. The
variable lease payments that do not depend on
an index or a rate are expensed in the period in
which they are incurred.
rate.
fixed payments
Lease liabilities are measured at amortised cost
using the effective interest method. The carrying
is a change
amounts are remeasured
if there
in the
lease payments arising
future
following:
from a change in an index or a rate used; residual
guarantee; lease term; certainty of a purchase option
and termination penalties. When a lease liability is
remeasured, an adjustment
the
corresponding right-of use asset, or to profit or
loss
if the carrying amount of the right-of-use
asset is fully written down.
is made
to
(CONTINUED)
(u)
Subsidiary
During the year the Company incorporated
a wholly owned subsidiary, East Laverton
Exploration Pty Ltd. No transactions have
been incurred by this entity for the year
ended 30 June 2020 and therefore the entity
has not been consolidated into the results
of the Company. The Statement of Financial
Position, Statement of Profit or Loss and Other
Comprehensive Income, Statement of Changes
in Equity and Statement of Cashflows for the
year then ended as shown in these Financial
Statements are considered to constitute those
of the Group.
(v)
Leases
Right of Use Assets
A right-of-use asset is recognised at the
commencement date of a lease. The right-of-
use asset is measured at cost, which comprises
the initial amount of the lease liability, adjusted
for, as applicable, any lease payments made
at or before the commencement date net of
any lease incentives received, any initial direct
costs incurred, and, except where included in
the cost of inventories, an estimate of costs
expected to be incurred for dismantling and
removing the underlying asset, and restoring
the site or asset.
Right-of-use assets are depreciated on a
straight-line basis over the unexpired period
of the lease or the estimated useful life of
the asset, whichever is the shorter. Where the
Company expects to obtain ownership of the
leased asset at the end of the lease term, the
depreciation is over its estimated useful life.
Right-of use assets are subject to impairment
or adjusted for any remeasurement of lease
liabilities.
46
STATEMENT OF SIGNIFICANT ACCOUNTING POLICIES
(CONTINUED)
(w)
Going Concern
During the period the Company incurred a net
loss of $1,878,291 (2019: loss of $1,435,517).
Net cash outflows from operating and investing
activities during the period were $3,165,059
(2019: cash outflows of $2,366,789).
The ability of the Company to continue to
pay its debts as and when they fall due is
dependent upon:
• Continued
cash management
and
monitoring of operating cashflows according
to exploration success. Future exploration
expenditure
is generally discretionary
in nature and exploration activities may
be slowed or suspended as part of the
Company’s cash management strategy;
• The Company has demonstrated its ability to
raise capital via equity placements and rights
issues to shareholders during the period.
Given the strong support of shareholders and
the prospectivity of the Company’s current
projects the Directors are confident that any
future capital raisings will be successful. The
Company also maintains a significant number
of shares available to issue under the ASX
Listing Rule capacity.
Given the potential funding options and cash
initiatives noted above, the
management
Directors believe the going concern basis
is appropriate.
Should the Company be unable to obtain
sufficient future funding and be successful in
completion of the transactions noted above,
there is a material uncertainty which may cast
significant doubt as to whether the Company
will be able to continue as a going concern
and whether it will realise its assets and
extinguish its liabilities in the normal course
of business and at the amounts stated in the
financial s tatements. T he fi nancial st atements
do not
include any adjustments relating
to the recoverability and classification of
recorded asset amounts nor to the amounts
and classification of liabilities that might be
necessary should the Company not continue
as a going concern.
47
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 JUNE 2020
NOTE 2: LOSS BEFORE INCOME TAX EXPENSE
Note
2020
$
2019
$
The following revenue and expense items are relevant in explaining the
financial performance for the year.
Revenue
Interest income – other parties
Expense
1,341
3,156
Rent and services charges are paid to a related party, refer to Note 18
76,371
79,294
Share based payment expense, refer to Note 17B
274,601
45,756
Interest expense
Employee benefits expense
(a)
(b)
51,607
-
255,737
240,120
Non-refundable consideration paid – Cox’s Find Gold Project
-
50,000
(a) Interest charges relate to $41,549 in interest paid on Director Loan of $500,000 received on 31 July 2019
(refer to Note 18 for further details) and $10,058 in relation to lease liabilities (refer Note 23).
(b) Of the employee remuneration expenses for the year to 30 June 2020 above, $25,542 was paid in
superannuation (2019: $17,031).
NOTE 3: AUDITOR’S REMUNERATION
2020
$
2019
$
The auditor of Great Southern Mining Limited is HLB Mann Judd.
Amounts received or due and receivable by HLB Mann Judd for:
Audit and review of financial reports
24,250
25,564
48
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 JUNE 2020
NOTE 4: INCOME TAX EXPENSE
(a) Recognised in the statement of comprehensive income
Current income tax on net loss for the year
Deferred tax relating to the origination and reversal of temporary differences
Total income tax benefit
(b) Reconciliation between income tax expense and pre-tax loss
Loss before tax
Income tax using the tax rate of 30% (2019: 30%).
Tax effect of:
Non-deductible expenses
Non-assessable income
Effect of temporary differences recognised directly in equity
Unused tax losses and temporary differences not recognised as
deferred tax assets
Income tax expense on pre-tax loss
(c) Tax expense/(benefit) relating to items of other
comprehensive income (continued)
Revaluation of financial assets
Disposal of financial assets
Income tax applicable thereto
(d) Unrecognised deferred tax balances
2020
$
2019
$
-
-
-
-
-
-
(1,878,291)
(563,487)
(1,435,516)
(430,655)
90,366
(11,741)
(83,430)
568,292
-
-
-
-
14,889
20,322
(51,393)
446,837
-
-
-
-
Deferred tax assets and (liabilities) calculated at 30% (2019: 30%) have not
been recognised in respect of the following:
Income tax losses
Temporary differences
3,751,800
2,643,500
(1,506,531)
(966,522)
2,245,269
1,676,978
Deductible temporary differences and tax losses do not expire under current tax legislation. Deferred tax assets
and deferred tax liabilities relating to (i) capitalised exploration expenditure for which immediate tax write-off is
available and (ii) revaluation of financial assets have not been recognised in the financial statements. Refer to Note
1(d).
49
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 JUNE 2020
NOTE 5: (LOSS) PER SHARE
Basic and diluted loss per share
2020
Cents
per share
2019
Cents
per share
(0.563)
(0.509)
Weighted average number of ordinary shares used in calculation of loss per
share
326,650,738
282,193,959
Loss used in calculation of basic and diluted (loss) per share
(1,878,291)
(1,435,516)
Given the Company is in a loss position for the year ended 30 June 2020 the options that have been issued during
the period are anti-dilutive in nature and therefore do not impact the diluted earnings per share calculation.
NOTE 6: CASH AND CASH EQUIVALENTS
2020
$
2019
$
Cash on hand and at bank
3,067,264
208,044
The Company does not have any funds on short-term deposit.
NOTE 7: OTHER ASSETS
Prepaid expenses
3,067,264
208,044
2020
$
2019
$
65,401
31,409
NOTE 8: OTHER RECEIVABLES – NON-CURRENT
2020
$
2019
$
Exploration tenement guarantees
13,500
12,500
50
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 JUNE 2020
NOTE 9: FINANCIAL ASSETS AT FAIR VALUE THROUGH OTHER
COMPREHENSIVE INCOME
2020
$
2019
$
Listed securities – opening balance
Fair value movement through other comprehensive income
Disposal of securities during the period
Total Financial Assets at period end.
-
-
-
-
180,000
(25,729)
(154,271)
-
The financial assets above were measured at fair value in the statement of financial position up until the date of
sale. The fair value was determined with reference to the quoted prices (unadjusted) in active markets for identical
assets (Level 1). The balance of the reserve of $67,741 included within equity was transferred to accumulated losses
on disposal.
The Company has a number of financial instruments which are not measured at fair value in the statement of
financial position.
The Directors consider that the carrying amounts of receivables, current payables and current liabilities are
considered to be a reasonable approximation of their fair values.
51
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 JUNE 2020
NOTE 10: PLANT AND EQUIPMENT
Plant and equipment at cost
Less: Accumulated depreciation
Movement schedule for plant and equipment
Opening written down value
Additions (i)
Disposals
Depreciation
Loss on sale
2020
$
184,764
(100,213)
84,551
14,913
90,424
-
(20,786)
84,551
2019
$
93,236
(78,323)
14,913
19,518
-
-
(4,605)
14,913
(i) As at June 2020 the Company had financed the purchase of a motor vehicle for use on site. The total
amount financed was $75,000 with the vehicle used as collateral / security for the loan. Refer Note 13 for
further details.
NOTE 11: EXPLORATION AND EVALUATION
EXPENDITURE
Cost brought forward in respect of areas of interest in the
exploration and evaluation stage
2020
$
2019
$
4,363,186
3,455,352
Expenditure incurred during the year
1,874,632
920,073
Acquisition of Cox’s Find Gold Project
(a)
Deferred Consideration relating to Cox’s Find Gold Project
(b)
Acquisition of Mt Weld Tenements
Impairment of exploration expenditure
150,000
800,000
-
-
-
-
134,240
(146,479)
Cost carried forward
7,187,818
4,363,186
52
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 JUNE 2020
NOTE 11: EXPLORATION AND EVALUATION
EXPENDITURE
In September 2019 the Company completed the acquisition of the Cox’s Find Gold Project.
The material terms of the transaction are outlined below:
Transaction Terms
Consideration
$200,000. $150,000 (a) was capitalised during the year. $50,000 was expensed in
the 2019 financial year prior to transfer to the Company.
Deferred Payment 1
(b) $800,000 cash payment to be made within twelve (12) months of entering
formal sale and purchase agreement. An additional $100,000 was paid to the
vendor in May 2020 to further defer the payment until August 2021. The amount
has been classified as a non-current liability. Refer to Note 14.
Deferred Payment 2
$1,000,000 payable in cash or shares (to be determined) subject to the
declaration of a JORC 2012 Mineral Resource of at least 500,000 ounces of gold.
Deferred Payment 1 of $800,000 has been recognised as a non-current liability and is due in August 2021. Deferred
Payment 2 has not be recognised as it is not possible to reliably estimate the timing of the payment to be made,
or the amount of any payment required, if any. The exploration program required to declare a JORC 2012 Mineral
Resource of at least 500,000 is at the discretion of the Company.
Under the Sale and Purchase agreement the Vendor has registered a mortgage over the Project and
tenements M38/578, M38/170 and M38/740 in relation to Deferred Payment 1 and 2.
The current carrying value of the Project is: $1,911,302.
The recoupment of costs carried forward in relation to areas of interest in the exploration and evaluation phases
is dependent on successful development and commercial exploitation or sale of respective areas.
53
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 JUNE 2020
NOTE 12: TRADE AND OTHER PAYABLES
Trade creditors (a)
Accruals and other payables (a)
Related party payables
Amount owing to related party - Mon Ami Gold Project (b)
2020
$
2019
$
486,958
272,751
175,656
92,456
-
-
8,630
150,000
662,614
523,837
(a)
(b)
All trade and other payables are non-interest bearing and are normally settled on 30 – 60-day terms. All
amounts are short-term. The carrying values of trade payables and other payables are considered to be a
reasonable approximation of fair value.
Amount was payable to an entity related to the Executive Chairman relating to the acquisition of the Mon
Ami Gold Project in 2018. All amounts owing as at 30 June 2019 have been paid during the current period.
NOTE 13: BORROWINGS
Current
Director Loan (a)
Financial Liability (b)
Non-current
Financial Liability (b)
2020
$
2019
$
500,000
11,691
511,691
64,239
-
-
-
-
On 30 July 2019 an entity associated with director John Terpu provided a $500,000 loan to the Company.
The loan is unsecured, repayable on demand and bears an interest rate of 9.9% per annum. $200,000 has
been paid since balance date.
As at June 2020 the Company had financed the purchase of a motor vehicle for use on site. The facility is
secured with the vehicle used as collateral / security for the loan. The term of the facility is three years with
interest being 3.32%. 100% of the facility has been utilised at the end of the financial year.
(a)
(b)
54
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 JUNE 2020
NOTE 14: DEFERRED CONSIDERATION
Deferred consideration - Cox’s Find Acquisition
2020
$
2019
$
800,000
800,000
-
-
Refer to Note 11 for further information on the Deferred Consideration payable following the acquisition of the
Cox’s Find Gold Project in September 2019. In May 2020 it was negotiated with the vendor to defer the payment
to August 2021.
NOTE 15: EMPLOYEE BENEFITS
Current employee entitlements
Annual Leave
Long-Service Leave
Movements in employee benefits
Opening
Accrued
Taken
Closing
2020
$
2019
$
62,674
47,388
32,310
30,784
94,984
78,172
47,388
30,784
28,643
1,526
(13,357)
-
62,674
32,310
55
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 JUNE 2020
NOTE 16: ISSUED CAPITAL
2020
2019
Issued capital comprises:
Fully Paid Ordinary Shares
408,095,772
28,112,640 303,412,338
23,611,759
No.
$
No.
$
Movement in issued shares for
the year
Balance at beginning of the
financial year
Escrowed Securities
Date
No.
$
No.
$
303,412,338
23,611,759 245,899,003
21,750,349
Exercise of Unlisted Options
20-Sep-19
300,000
Issue of shares to Senior Advisor
16-Oct-19
1,000,000
6,000
60,000
Placement
25-Oct-19
27,000,000
1,215,000
Securities issued under Long
Term Incentive Plan
Cancellation of shares issued to
Senior Advisor
05-Nov-19
1,450,000
80,910
27-Nov-19
(1,000,000)
(60,000)
Issue of shares to advisers
10-Mar-20
800,000
20,400
Shares issued under a Cleansing
Prospectus
01-Apr-20
100
4
Placement
08-May-20
70,000,000
3,150,000
Exercise of Listed Options
05-Jun-20
133,334
6,667
Exercise of Unlisted Options
11-Jun-20
5,000,000
300,000
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
Placement
06-Aug-18
Acquisition of Tenement Package
01-Nov-18
Exercise of Unlisted Options
31-Dec-18
Issue of Shares on Conversion of
Loan from Director
Placement
11-Mar-19
22-Mar-19
Exercise of Unlisted Options
29-Mar-19
Placement
30-Apr-19
Costs associated with the issue
of shares
Balance at end of the financial
year
56
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
31,846,669
1,194,250
1,000,000
1,500,000
35,000
30,000
10,000,000
300,000
8,333,333
250,000
1,500,000
30,000
3,333,333
100,000
(278,100)
-
(77,840)
408,095,772
28,112,640 303,412,338
23,611,759
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 JUNE 2020
NOTE 17: RESERVES
Balance at beginning of the financial
year
Transfer on cancellation/exercise of
options
Change during the period
1,357,375
Balance at end of the financial year
1,357,375
17 A - Listed
Option Reserve
17 B - Unlisted Option
Reserve
Financial Asset
Reserve
2020
2019
2020
2019
2020
2019
$
$
$
$
$
$
-
-
-
-
-
-
80,756
35,000
(80,756)
-
274,601
45,756
274,601
80,756
-
-
-
-
93,470
-
(93,470)
-
Total balance of Reserves at balance date is $1,631,975 (2019: $80,756).
The financial assets reserve records the revaluation of financial assets at fair value through other comprehensive
income. During the period the Company disposed of its financial assets. These financial assets were measured at
fair value with movements recognised in the Reserve. On derecognition the remaining balance in the reserve
has been transferred within equity to accumulated losses.
The Unlisted Option Reserve record the fair value of options issued during the period using valuation models
as described in Note 1 and Note 17B. The transfer of Share Option Reserve to accumulated losses was on
cancellation/exercise of Unlisted Options during the period.
57
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 JUNE 2020
NOTE 17A: LISTED OPTION RESERVE
2020
Listed Options
Movement of listed options for the year
Balance at beginning of the financial year
Issued under Rights Issue
Placement of Shortfall
Placement
No.
$
132,004,212
1,357,375
Date
No.
$
05-Sep-19
83,588,449
25-Oct-19
17,548,997
25-Oct-19
27,000,000
835,884
175,490
270,000
60,000
22,667
1
(6,667)
Securities issued Under Long Term Incentive Plan (a)
05-Nov-19
2,000,000
Issue of shares to advisers (b)
Cleansing Prospectus
Exercise of listed options
10-Mar-20
2,000,000
31-Mar-20
100
05-Jun-20
(133,334)
Balance at end of the financial year
132,004,212
1,357,375
The Listed Options have an exercise price of $0.05 on or before 4 September 2022.
a)
b)
2,000,000 Listed Options were issued to a consultant. The Listed Options were issued at $0.03
per Listed Option being the trading price on the date of issue. The 1,450,000 fully paid ordinary
shares issued at a $0.056 per share in satisfaction of invoices outstanding. The securities were
issued pursuant to the Company’s adopted long-term incentive plan for services rendered.
2,000,000 Listed Options were issued to advisers during the period regarding competing
tenement applications. The Listed Options were issued at $0.013 per Listed Option being the
trading price on the date of issue.
No Listed Options were issued during the year ended 30 June 2019.
58
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 JUNE 2020
NOTE 17B: UNLISTED OPTION RESERVE
Note
No.
2020
$
2019
No.
$
Opening Balance
12,100,000
80,756
11,800,000
35,000
Movement of unlisted options for the year
Transfer exercise of Unlisted Options
Transfer exercise of Unlisted Options
Cancellation of Unlisted Options
Issue of Options under Long Term Incentive
Plan
Issue of Unlisted Options to Corporate
Advisers
a
a
a
b
c
(300,000)
(6,000)
-
(39,756)
(11,800,000)
(35,000)
-
-
-
-
-
-
3,000,000
8,518
3,300,000
45,756
10,000,000
266,084
Exercise of Unlisted Options
(5,000,000)
-
(3,000,000)
-
Balance at end of the financial year
8,000,000
274,601
12,100,000
80,756
a)
Following the cancellation of the 11,800,000 Unlisted Options on 27 November 2019 the
Company had no Unlisted Options on issue. The Company reclassified the $80,756 in the
Option Reserve to accumulated losses in the Statement of Changes in Equity. Subsequent to this,
the 3,000,000 Unlisted Options in (b) were issued under the Company’s Long-Term Incentive Plan
and 10,000,000 Unlisted Options (c) were issued to Corporate Advisers. The valuation assumptions
used are as follows
Valuation assumptions for Unlisted Options issued during the year
b
c
Grant date
Share price at date of grant
Volatility
Expiry date
Dividend yield
Risk free investment rate
Vesting probability
Fair value at grant date
Exercise price at date of grant
Exercisable from
Weighted average remaining contractual life
27-Feb-20
$ 0.043
84%
14-May-20
$ 0.057
84%
Refer below
04-Sep-22
Nil
0.50%
between 9% and
75%
refer below
$ 0.050
Refer below
2.3 yrs
Nil
0.50%
n/a
0.026
$ 0.060
14-May-20
2.1 yrs
The Options issued on 27 February 2020 had a number of market-based vesting conditions. The fair value of
each tranche was determined through the use of a Monte-Carlo option price calculation.
59
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 JUNE 2020
Vesting Conditions attached to B
Tranche
Number
Exercise
Price
Vesting Condition
Expiry date
Fair value
($) per
option
Tranche 1
1,000,000
$0.05
Tranche 2
1,000,000
$0.05
Tranche 3
1,000,000
$0.05
Executive remains an employee
of the Company (at the Executive
level or higher) as at 30 June 2021
When GSN share price reaches
$0.12 based on a 20-trading day
VWAP.
When GSN share price reaches
$0.18 based on a 20-trading day
VWAP.
30-Jun-22
$1.5 cents
30-Jun-22
$0.3 cents
30-Jun-23
$0.2 cents
Tranche 2 vested subsequent to balance date and was immediately exercised by the holder on 17 July 2020.
$50,000 was received by the Company. Tranche 1 and Tranche 3 have lapsed.
60
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 JUNE 2020
NOTE 18: RELATED PARTY DISCLOSURES
The following comprises amounts paid or payable and received or receivable applicable to entities in which key
management personnel (KMP) have an interest.
Directors and related parties
Paid/payable to:
Rent and service charges paid to Ruby Lane Pty Ltd at Terpu Trust
2020
$
2019
$
Note
76,371
79,294
10,000,000 Fully paid ordinary shares issued to Valleyrose Pty Ltd in
satisfaction for the $300,000 loan provided to the Company in December
2018.
16
-
300,000
Amounts paid to Valleybrook Investments Pty Ltd for the Acquisition of
Mon Ami during the current period.
150,000
-
Amounts owing to related parties at balance date
J Terpu (as Director of Chellingtons Pty Ltd atf Red Star Trust) for
administration services)
Mon Ami Acquisition - April 2018
Loan provided by Valleyrose Pty Ltd in July 2019 (a)
Interest charges on loan provided by Valleyrose Pty Ltd in July 2019
(a) Subsequent to balance date, $200,000 has been repaid.
The totals of remuneration paid to KMP of the Company during the year
are as follows:
Short-term employee benefits
Post-employment benefits
Share Based payments
Total KMP compensation
12
13
-
-
8,630
150,000
500,000
41,549
-
-
2020
$
2019
$
583,344
488,155
41,325
47,756
8,518
19,878
633,187
555,789
61
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 JUNE 2020
NOTE 19: COMMITMENTS AND CONTINGENT LIABILITIES
a)
Exploration Expenditure Commitments
The Company has certain obligations to perform exploration work and expend minimum amounts of money on
such works on mineral exploration tenements.
These obligations will vary from time to time, subject to statutory approval and capital management. The terms of
the granted licences and those subject to relinquishment will alter the expenditure commitments of the Company
as will change to areas subject to licence.
b)
Native Title
Native title claims have been made with respect to areas which include tenements in which the Company has
interests. The Company is unable to determine the prospects for success or otherwise of the claims and, in any
event, whether or not and to what extent the claims may significantly affect the Company or its projects.
(c)
Contingencies
(i)
As part of the acquisition of the Mon Ami Gold Project during 2018 the Company has entered a
Royalty Deed with Valleybrook Investments Pty Ltd (“Valleybrook”), being a company related to
J Terpu. The royalty entitles Valleybrook to a net smelter return of 2.75% on revenue produced from
sales of ore extracted. The term of the Royalty is for the life of the mining lease on the Mon Ami Gold
Project, subject to the availability of ore to be extracted. At the date of this report the Company
is not in a position to reliably estimate the amount, if any, that would be paid to Valleybrook as a
result of successful economic extraction of Ore from the project given its exploration stage and as
such this amount has not been recognised in the accounts of the Company at balance date.
(ii)
In September 2019 the Company completed the acquisition of the Cox’s Find Gold Project. The
material terms of the transaction are disclosed in Note 11.
Included in the consideration is Deferred Payment 2 of $1,000,000 payable in cash or shares (to
be determined) subject to the declaration of a JORC 2012 Mineral Resource of at least 500,000
ounces of gold and a 1.5% Net Smelter Return (NSR).
Deferred Payment 2 will not be recognised until such time that a reliable estimate can be made
on the timing of any payment, if any. The exploration program required to declare a JORC 2012
Mineral Resource of at least 500,000 ounces of gold is at the discretion of the Company.
(d)
Lease Commitments
The Company leases its head office premises. Previously the lease commitments were classified as an operating
lease. Under AASB16, these have been recognised as a Right-of-Use asset and a lease liability.
For lease liability commitments refer to Note 23.
62
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 JUNE 2020
NOTE 20: SEGMENT INFORMATION
The Company undertakes mineral exploration and evaluation work on a number of tenements located in Western
Australia and North Queensland.
Management currently identifies the Company’s assets in each location as separate operating segments.
These operating segments are monitored by the Company’s chief operating decision maker and strategic decisions
are made on the basis of available cash reserves and exploration results.
The items included in the statement of profit or loss and other comprehensive income equate to the Corporate
Segment. Segment assets and liabilities are disclosed in the table below:
Western Australia
Queensland
Corporate
Total
2020
2019
2020
2019
2020
2019
2020
2019
$
$
$
$
$
$
$
$
Assets
Exploration
& Evaluation
Expenditure
Cash & Cash
Equivalents
Other assets
4,228,057
1,981,082
2,959,761
2,382,105
-
-
7,187,818
4,363,187
-
-
-
-
-
-
-
-
3,067,264
208,044
3,067,264
208,044
385,576
58,822
385,576
58,822
Assets
4,228,057
1,981,082
2,959,761
2,382,105
3,452,840
266,866
10,640,658
4,630,053
Liabilities
718,797
220,214
39,879
224,902
1,599,373
156,892
2,358,049
602,008
The Company’s corporate assets, consisting of its corporate office headquarters are not allocated to any exploration
segment’s assets.
An impairment charge of $146,471 was recognised in 2019 in relation to the Company’s Queensland exploration
assets.
63
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 JUNE 2020
NOTE 21: FINANCIAL RISK MANAGEMENT
Overview
This note presents information about the Company’s exposure to credit, liquidity and market risks, its objectives,
policies and processes for measuring and managing risk, and the management of capital.
The Company does not use any form of derivatives as it is not at a level of exposure that requires the use of derivatives
to hedge its exposure. Exposure limits are reviewed by management on a continuous basis. The Company does
not enter into or trade financial instruments, including derivative financial instruments, for speculative purposes.
The Board of Directors has overall responsibility for the establishment and oversight of the risk management
framework. Management monitors and manages the financial risks relating to the operations of the Company
through regular reviews of the risks.
Credit risk
Credit risk is the risk of financial loss to the Company if a customer or counterparty to a financial instrument fails
to meet its contractual obligations and arises principally from the Company’s receivables from customers and
investment securities. Given the Company is not generating sales nor has significant receivable balances apart
from GST payments to be received from the ATO, at the reporting date there were no significant concentrations
of credit risk.
(i)
Cash and cash equivalents
The Company limits its exposure to credit risk by only investing in liquid securities and only with
counterparties that have an acceptable credit rating. The Company only holds bank accounts with major
Australian financial institutions.
(ii)
Trade and other receivables
As the Company operates primarily in exploration activities, it does not have trade receivables and therefore
is not exposed to credit risk in relation to trade receivables.
The Company where necessary establishes an allowance for impairment that represents its estimate
of expected losses in respect of other receivables and investments. Management does not expect any
counterparty to fail to meet its obligations.
(iii)
Exposure to credit risk
The carrying amount of the Company’s financial assets represents the maximum credit exposure.
The Company’s maximum exposure to credit risk at the reporting date was:
Carrying Amount
2020
$
2019
$
Cash and cash equivalents
3,067,264
208,044
Other receivables
13,500
12,500
(iv)
Impairment Losses
None of the Company’s other receivables are past due (2019: nil).
64
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 JUNE 2020
Liquidity Risk
Liquidity risk is the risk that the Company will not be able to meet its financial obligations as they fall due. The
Company’s approach to managing liquidity is to ensure, as far as possible, that it will always have sufficient liquidity
to meet its liabilities when due, under both normal and stressed conditions, without incurring unacceptable losses
or risking damage to the Company’s reputation.
The Company manages liquidity risk by maintaining adequate cash reserves from funds raised in the market and
by continuously monitoring forecast and actual cash flows. The Company’s interest-bearing liabilities include the
$500,000 Director loan and the motor vehicle finance.
The following are the Company’s contractual maturities of financial liabilities, including estimated interest payments
and excluding the impact of netting agreements:
30 June 2020 ($)
Carrying amount
Contractual
cash flows
6 mths or
less
6-12 mths
1-2 years
2-5 years
Interest Bearing
575,930
575,930
505,856
5,835
22,433
40,160
Non-interest bearing
1,462,614
1,466,803
662,614
-
800,000
-
2,038,544
2,042,733
1,168,470
5,835
822,433
40,160
30 June 2019 ($)
Carrying amount
Contractual
cash flows
6 mths or
less
6-12 mths
1-2 years
2-5 years
Non-interest bearing
523,232
523,232
523,232
-
-
-
The weighted average interest rate on the $500,000 Director loan is 9%.
The weighted average interest rate on the motor vehicle facility is 3.32%. 100% of the facility has been utilised at
the end of the financial year.
65
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 JUNE 2020
Market Risk
Market risk is the risk that changes in market prices, such as foreign exchange rates, interest rates and equity prices
will affect the Company’s income or the value of its holdings of financial instruments. The objective of market risk
management is to manage and control market risk exposures within acceptable parameters, while optimising the
return. The Company no longer holds investments in listed securities.
Currency Risk
The Company is not exposed to currency risk and at the reporting date the Company holds no financial assets or
liabilities which are exposed to foreign currency risk.
Commodity Price Risk
The Company operates primarily in the exploration and evaluation phase of gold projects and accordingly the
Company’s financial assets and liabilities are subject to minimal commodity price risk.
Interest Rate Risk
The Company is exposed to interest rate risk (primarily on its cash and cash equivalents), which is the risk that a
financial instrument’s value will fluctuate as a result of changes in the market interest rates on interest-bearing
financial instruments. The Company does not use derivatives to mitigate these exposures.
At balance date the Company did not have any cash held in term deposits. During the prior period, excess cash and
cash equivalents were held in short term deposit at interest rates maturing over 90 day rolling periods.
(i)
Fair value sensitivity analysis for fixed rate instruments
The Company does not account for any fixed rate financial assets and liabilities at fair value through profit
or loss or through equity, therefore a change in interest rates at the reporting date would not affect profit
or loss or equity.
(ii)
Cash flow sensitivity analysis for variable rate instruments
A change of 100 basis points in interest rates at the reporting date would have increased (decreased)
equity and profit or loss by the amounts shown below. This analysis assumes that all other variables remain
constant. The analysis is performed on the same basis for 2020 and 2019.
Profit or loss
Equity
100bp
increase
100bp
decrease
100bp
increase
100bp
decrease
$
$
$
$
30 June 2020
Variable rate instruments
33,630
-
33,630
-
30 June 2019
Variable rate instruments
1,978
(1,978)
1,978
(1,978)
Decrease in rate assumes that the interest rate on the variable rate instruments declines to nil.
66
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 JUNE 2020
Fair Values
Fair values versus carrying amounts
The fair values of financial assets and liabilities, together with the carrying amounts shown in the statement of
financial position are as follows:
30-Jun-20
30-Jun-19
Carrying
amount
$
Fair value
$
Carrying
amount
$
Cash and cash equivalents
3,067,264
3,067,264
208,044
Other receivables
13,500
13,500
12,500
Fair value
$
208,044
12,500
Trade and other payables
(662,614)
(662,614)
(523,837)
(523,837)
Borrowing – Director loan
(500,000)
(500,000)
Borrowing – Vehicle Finance
(75,930)
(75,930)
Deferred Consideration
(800,000)
(800,000)
-
-
-
-
-
-
Employee benefits
(94,984)
947,236
(94,984)
947,236
(78,172)
381,464
(78,172)
381,464
Fair value measurement of financial instruments
Financial assets and financial liabilities measured at fair value in the statement of financial position are grouped into
three levels of a fair value hierarchy. The three levels are defined based on the observability of significant inputs to
the measurement, as follows:
•
•
•
Level 1: quoted prices (unadjusted) in active markets for identical assets or liability.
Level 2: inputs other than quoted prices included within Level 1 that are observable for the asset
or liability, either directly or indirectly.
Level 3: unobservable inputs for the asset or liability.
All financial assets carrying amount is equal to their fair values. Financial liabilities carrying value and fair values are
determined using Level 3 inputs.
Capital Management
Capital is defined as the equity of the Company.
The Company’s objectives when managing capital are to safeguard the Company’s ability to continue as a going
concern, so as to maintain a strong capital base sufficient to maintain future exploration and development of its
projects.
The Company’s focus has been to raise sufficient funds through equity to fund exploration and evaluation activities.
The Company monitors capital requirements regularly and is not subject to externally imposed capital requirements.
There were no changes in the Company’s approach to capital management during the year. The Board considers
capital management at each Board meeting and mitigates risks when identified.
67
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 JUNE 2020
NOTE 22: STATEMENT OF CASH FLOWS
2020
$
2019
$
Reconciliation of operating loss after income tax to net cash used in operating activities
Loss after income tax
(1,878,291)
(1,435,516)
Add: Non-cash items
Depreciation - PPE
Share based payment expense
Impairment of exploration expenditure
Share based payment allocated to consulting fees
Share based payment to acquire tenement not capitalised
Change in assets and liabilities
(Increase)/decrease in other current assets
Increase/(decrease) in operating payables
Increase/(decrease) in employee entitlements
74,379
274,601
-
60,000
36,640
(33,992)
133,016
16,811
5,295
45,756
146,471
-
-
(18,165)
(207,735)
44,158
Net cash used in operating activities
(1,316,835)
(1,419,735)
Non-cash investing and financing activities
During the period the Company acquired a motor vehicle via a finance facility of $75,000. Refer Note 13.
68
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 JUNE 2020
NOTE 23A: RIGHT OF USE ASSET
Cost
Recognised on 1 July 2019 on adoption of AASB 16
Additions
At 30 June 2020
Accumulated depreciation
Recognised on 1 July 2019 on adoption of AASB 16
Charge for the year
At 30 June 2020
Carrying Amount
At 1 July 2019
At 30 June 2020
Amounts recognised in the profit and loss
Expense on right-of-use asset
Interest expense on lease liabilities
Expense relating to short term leases (a)
Total cash outflow for leases
2020
$
275,303
-
275,303
-
(53,179)
(53,179)
275,303
222,124
(53,179)
(10,058)
(16,800)
(81,919)
AASB 16 has been adopted during the period, refer to Note 1(d) for details.
The Company leases its registered head office premises. The remaining lease term is 4yrs. (2019: 5yrs).
(a) The Company leases a base of operations including a shed and office in Laverton, Western Australia. The lease
is less than one year. These leases are either short-term or low-value, so have been expensed as incurred and not
capitalised as right-of-use assets.
NOTE 23B: LEASE LIABILITIES
LEASE LIABILITIES
Current
Non-Current
2020
$
52,887
171,634
224,521
AASB 16 has been adopted during the period, refer to Note 1(d) for details. Refer to Note 23A for lease details.
69
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 JUNE 2020
NOTE 24: EVENTS AFTER REPORTING DATE
In July 2020 the Company announced the results of its successful drilling programs at the Cox’s Find and
Mon Ami Gold Projects in Laverton, Western Australia.
On 29 July, 12 August and 21 September 2020 the Company announced it had lodged applications over
4 strategic and highly prospective tenements immediately adjacent to the 100% owned Cox’s Find Gold
Project in Western Australia. GSN has made applications over tenements E38/3518, P38/4523, P38/4524
and P38/4525.
On 16 July 2020 the Company announced the results of the geochemical mapping and sampling program
collected at the Edinburgh Park project in North Queensland. Around 652 soil samples and 11 rock chip
samples completed on a wide spaced grid. The geochemical mapping program, the first systematic gold
focused exploration program undertaken in this area, was completed on a wide spaced (100m x 100m) grid
over highly prospective targets identified from interpretation of hyperspectral data in conjunction with
reconnaissance geological mapping and aerial geophysics.
On 2 September 2020 the Company announced the appointment of Mr Sean Gregory as Chief Executive Officer
and Mr Octavio Garcia as the Head of Exploration – Queensland. Mr Mark Major resigned as Chief Operating
Officer.
70
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 JUNE 2020
The following unlisted securities were issued after the reporting date:
Unlisted Options
Tranche
No.
Exercise
Price
Vesting Condition
Expiry Date
Head of
Exploration -
Western Australia
(issued 10 July
2020)
Head of
Exploration –
Queensland
(issued 2
September 2020)
1
2
1
2
600,000
$0.05
Employee remains with
Company as at 30 June 2021.
30-Jun-22
600,000
$0.05
Employee remains with
Company as at 30 June 2022.
30-Jun-23
1,000,000
$0.10
Employee remains with
Company as at 30 June 2022.
30-Jun-23
1,000,000
$0.20
Vest on discovery and
resource development
of a 500,000-ounce gold
equivalent prospect withing the
Queensland project portfolio.
30-Jun-25
Unlisted Options
Tranche
No.
Exercise
Price
Vesting Condition
Expiry Date
Chief Executive
Officer (issued 2
September 2020)
1
2
3
500,000
$0.10
Vest after 12 months of service
30-Jun-23
500,000
$0.15
Vest after 24 months of service
30-Jun-24
500,000
$0.20
Vest after 36 months of service
30-Jun-25
On 17 July 2020 1,000,000 Fully Paid Ordinary Shares were issued on the exercise of 1,000,000 Unlisted Options
at $0.05 each.
71
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 JUNE 2020
Performance Rights
Performance Rights
Tranche
No.
Exercise
Price
Vesting Condition
Expiry Date
Chief Executive
Officer (issued 2
September 2020)
1
2
3
2,000,000
2,000,000
2,000,000
nil
nil
nil
Share price of $0.25 based on
20-trading day VWAP.
Share price of $0.35 based on
20-trading day VWAP.
Share price of $0.45 based on
20-trading day VWAP.
Note 1
Note 1
Note 1
Note 1: Performance Rights are convertible into Shares on a one for one basis for no consideration upon exercise
by the holder on or before the date which is 2 years after issue.
In July 2020 a second finance facility was entered to acquire a second motor vehicle. The terms of that facility are
identical to the financial liability recognised at 30 June 2020.
Coronavirus impact
The impact of the Coronavirus (COVID-19) pandemic is ongoing and whilst it has little financial impact on the
Company up to 30 June 2020, it is not practicable to estimate the potential impact, positive or negative, after
the reporting date. The situation is rapidly developing and is dependent on measures imposed by the Australian
Government and other countries, such as maintaining social distancing requirements, quarantine, travel restrictions
and any economic stimulus that may be provided.
Apart from the above, there has not been any other matter or circumstance that has arisen after the reporting
date that has significantly affected, or may significantly affect, the operations of the Company, the results of those
operations, or the state of affairs of the Company in future financial periods.
72
DIRECTORS’ DECLARATION
1.
In the opinion of the Directors of Great Southern Mining Limited (the “Company”):
(a)
the accompanying financial statements and notes comply with the Corporations Act 2001 including:
(i)
(ii)
giving a true and fair view of the Company’s financial position at 30 June 2020 and of its
performance for the year then ended; and
complying with Australian Accounting Standards, the Corporations Regulations 2001,
professional reporting requirements and other mandatory requirements.
there are reasonable grounds to believe that the Company will be able to pay its debts as and
when they become due and payable.
the financial statements and notes thereto are in accordance with International Financial Reporting
Standards issued by the International Accounting Standards Board.
(b)
(c)
2.
This declaration has been made after receiving the declarations required to be made to the Directors in
accordance with Section 295A of the Corporations Act 2001 for the financial year ended 30 June 2020.
This declaration is signed in accordance with a resolution of the Board of Directors.
John Terpu
Executive Chairman
Perth WA
26 September 2020
73
INDEPENDENT AUDITOR’S REPORT
To the members of Great Southern Mining Limited
Report on the Audit of the Financial Report
Opinion
We have audited the financial report of Great Southern Mining Limited (“the Company”) which
comprises the statement of financial position as at 30 June 2020, the statement of profit and Loss
and other comprehensive income, the statement of changes in equity and the statement of cash
flows for the year then ended, and notes to the financial statements, including a summary of
significant accounting policies, and the directors’ declaration.
In our opinion, the accompanying financial report of the Company is in accordance with the
Corporations Act 2001, including:
a)
giving a true and fair view of the Company’s financial position as at 30 June 2020 and of its
financial performance for the year then ended; and
b)
complying with Australian Accounting Standards and the Corporations Regulations 2001.
Basis for opinion
We conducted our audit in accordance with Australian Auditing Standards. Our responsibilities
under those standards are further described in the Auditor’s Responsibilities for the Audit of the
Financial Report section of our report.
We are independent of the Company in accordance with the auditor independence requirements
of the Corporations Act 2001 and the ethical requirements of the Accounting Professional and
Ethical Standards Board’s APES 110 Code of Ethics for Professional Accountants (“the Code”) that
are relevant to our audit of the financial report in Australia.
We have also fulfilled our other ethical responsibilities in accordance with the Code.
We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis
for our opinion.
Material uncertainty related to going concern
We draw attention to Note 1(w) in the financial report, which indicates that a material uncertainty
exists that may cast significant doubt on the entity’s ability to continue as a going concern. Our
opinion is not modified in respect of this matter.
Key audit matters
Key audit matters are those matters that, in our professional judgement, were of most significance
in our audit of the financial report of the current period. These matters were addressed in the context
of our audit of the financial report as a whole, and in forming our opinion thereon, and we do not
provide a separate opinion on these matters. We have determined the matters described below to
be the key audit matters to be communicated in our report.
74
Key Audit Matter
How our audit addressed the key
audit matter
Carrying value of exploration and evaluation
expenditure
Refer to Note 11
The Company has capitalised exploration and
evaluation expenditure of $7,187,818 as at 30
June 2020.
Our audit procedures determined that the
carrying value of exploration and evaluation
expenditure was a key audit matter as it was an
area which required the most communication
with those charged with governance and was
determined to be of key importance to the users
of the financial statements.
Our procedures included but were not
limited to the following:
- We obtained an understanding of the
key
associated with
management’s review of the carrying
value of exploration and evaluation
expenditure;
processes
- We obtained evidence
the
Company has current rights to tenure
of its areas of interest;
that
- We substantiated a sample of
additions to exploration expenditure
during the year;
- We enquired with management and
reviewed ASX announcements and
minutes of Directors’ meetings
to
ensure that the Company had not
decided to discontinue exploration and
evaluation at its areas of interest; and
- We examined the disclosure made in
the financial report.
Information other than the financial report and auditor’s report thereon
The directors are responsible for the other information. The other information comprises the
information included in the Company’s annual report for the year ended 30 June 2020, but does
not include the financial report and our auditor’s report thereon.
Our opinion on the financial report does not cover the other information and accordingly we do not
express any form of assurance conclusion thereon.
In connection with our audit of the financial report, our responsibility is to read the other information
and, in doing so, consider whether the other information is materially inconsistent with the financial
report or our knowledge obtained in the audit or otherwise appears to be materially misstated.
If, based on the work we have performed, we conclude that there is a material misstatement of this
other information, we are required to report that fact. We have nothing to report in this regard.
Responsibilities of the directors for the financial report
The directors of the Company are responsible for the preparation of the financial report that gives
a true and fair view in accordance with Australian Accounting Standards and the Corporations Act
2001 and for such internal control as the directors determine is necessary to enable the preparation
of the financial report that gives a true and fair view and is free from material misstatement, whether
due to fraud or error.
In preparing the financial report, the directors are responsible for assessing the ability of the
Company to continue as a going concern, disclosing, as applicable, matters related to going
concern and using the going concern basis of accounting unless the directors either intend to
liquidate the Company or to cease operations, or have no realistic alternative but to do so.
75
Auditor’s responsibilities for the audit of the financial report
Our objectives are to obtain reasonable assurance about whether the financial report as a whole is
free from material misstatement, whether due to fraud or error, and to issue an auditor’s report that
includes our opinion. Reasonable assurance is a high level of assurance, but is not a guarantee
that an audit conducted in accordance with Australian Auditing Standards will always detect a
material misstatement when it exists. Misstatements can arise from fraud or error and are
considered material if, individually or in the aggregate, they could reasonably be expected to
influence the economic decisions of users taken on the basis of this financial report.
As part of an audit in accordance with the Australian Auditing Standards, we exercise professional
judgement and maintain professional scepticism throughout the audit. We also:
-
-
-
-
-
Identify and assess the risks of material misstatement of the financial report, whether due to
fraud or error, design and perform audit procedures responsive to those risks, and obtain audit
evidence that is sufficient and appropriate to provide a basis for our opinion. The risk of not
detecting a material misstatement resulting from fraud is higher than for one resulting from
error, as fraud may involve collusion, forgery, intentional omissions, misrepresentations, or the
override of internal control.
Obtain an understanding of internal control relevant to the audit in order to design audit
procedures that are appropriate in the circumstances, but not for the purpose of expressing
an opinion on the effectiveness of the Company’s internal control.
Evaluate the appropriateness of accounting policies used and the reasonableness of
accounting estimates and related disclosures made by the directors.
Conclude on the appropriateness of the directors’ use of the going concern basis of accounting
and, based on the audit evidence obtained, whether a material uncertainty exists related to
events or conditions that may cast significant doubt on the Company’s ability to continue as a
going concern. If we conclude that a material uncertainty exists, we are required to draw
attention in our auditor’s report to the related disclosures in the financial report or, if such
disclosures are inadequate, to modify our opinion. Our conclusions are based on the audit
evidence obtained up to the date of our auditor’s report. However, future events or conditions
may cause the Company to cease to continue as a going concern.
Evaluate the overall presentation, structure and content of the financial report, including the
disclosures, and whether the financial report represents the underlying transactions and
events in a manner that achieves fair presentation.
We communicate with the directors regarding, among other matters, the planned scope and timing
of the audit and significant audit findings, including any significant deficiencies in internal control
that we identify during our audit.
We also provide the directors with a statement that we have complied with relevant ethical
requirements regarding independence, and to communicate with them all relationships and other
matters that may reasonably be thought to bear on our independence, and where applicable,
related safeguards.
From the matters communicated with the directors, we determine those matters that were of most
significance in the audit of the financial report of the current period and are therefore the key audit
matters. We describe these matters in our auditor’s report unless law or regulation precludes public
disclosure about the matter or when, in extremely rare circumstances, we determine that a matter
should not be communicated in our report because the adverse consequences of doing so would
reasonably be expected to outweigh the public interest benefits of such communication.
76
Report on the Remuneration Report
Opinion on the remuneration report
We have audited the Remuneration Report included within the directors’ report for the year ended
30 June 2020.
In our opinion, the Remuneration Report of Great Southern Mining Limited for the year ended 30
June 2020 complies with section 300A of the Corporations Act 2001.
Responsibilities
The directors of the Company are responsible for the preparation and presentation of the
Remuneration Report in accordance with section 300A of the Corporations Act 2001. Our
responsibility is to express an opinion on the Remuneration Report, based on our audit conducted
in accordance with Australian Auditing Standards.
HLB Mann Judd
Chartered Accountants
Perth, Western Australia
26 September 2020
M R Ohm
Partner
77
ASX ADDITIONAL INFORMATION
ASX ADDITIONAL INFORMATION
Additional information as required by the Australian Stock Exchange Limited Listing Rules and not
disclosed elsewhere in this report is set out below. All information as at 10 September 2020 (Calculation
Date) unless noted otherwise.
1.
Shareholder Information
As at 10 September 2020 the Company had 1553 holders of Ordinary Fully Paid Shares and 249
1.1
holders of Listed Options.
Voting Rights
Subject to any rights or restrictions for the time being attached to any class or classes (at present there are
none) at general meetings of shareholders or classes of shareholders:
(a)
(b)
(c)
each shareholder entitled to vote, may vote in person or by proxy, attorney or representative;
on a show of hands, every person present who is a shareholder or a proxy, attorney or
representative of a shareholder has one vote; and
on a poll, every person present who is a shareholder or a proxy, attorney or representative of a
shareholder shall, in respect of each Fully Paid Share held, or in respect of which he/she has
appointed a proxy, attorney or representative, have one vote for the share, but in respect of partly
paid Shares shall have a fraction of a vote equivalent to the proportion which the amount paid up
bears to the total issue price for the Share.
Unlisted and Listed Options do not carry any voting rights.
1.2
Distribution of Securities
Holding Between
Securities
No. of
holders
Securities
No. of
holders
Securities
No. of
holders
Listed Shares
Listed Options
Unlisted Options
100,001 and Over
10,001 to 100,000
5,001 to 10,000
1,001 to 5,000
1 to 1,000
Total
Unmarketable Parcels
374,809,738
30,958,050
2,826,991
495,516
5,477
409,095,772
269
783
345
129
27
1,553
127
146,393,991
5,404,872
172,235
30,982
2,126
152,004,206
112
97
22
9
9
249
25
10,900,000
0
0
0
0
10,900,000
n/a
5
0
0
0
0
5
n/a
One Unlisted Option holder, Pareto Nominees Pty Ltd, holds 5,000,000 Unlisted Options exercisable at $0.06
each on or before 4 September 2022. No securities are subject to escrow.
1.3
Substantial Holders:
The following holders of securities are recorded as substantial holders of securities
Rank Name
1
2
3
4
VALLEYROSE PTY LTD
DANNY TAK TIM CHAN
VALLEYBROOK INVESTMENTS PTY LTD
DAVIDE BOSIO and ASSOCIATED COMPANIES
Fully Paid
Shares
78,101,536
50,006,323
47,207,815
26,700,000
%
19%
12%
12%
7%
Listed
Options
24,867,179
21,668,775
14,235,939
n/a
%
16%
14%
9%
n/a
78
| 80
Twenty Largest quoted security holders
Twenty Largest quoted security holders
The names of the twenty largest holders of quoted equity securities are listed below:
The names of the twenty largest holders of quoted equity securities are listed below:
Fully Paid Ordinary Shares
Listed Options
Name
No. Held
%
Name
No. Held
%
Performance Rights
1
VALLEYROSE PTY LTD
2 DANNY TAK TIM CHAN
78,101,536 19.09 1
VALLEYROSE PTY LTD
24,867,179 16.36
50,006,323 12.22 2 DANNY TAK TIM CHAN
21,668,775 14.26
3
4
5
VALLEYBROOK INVESTMENTS
PTY LTD
47,207,815 11.54 3
VALLEYBROOK
INVESTMENTS PTY LTD
14,235,939
9.37
PARETO NOMINEES PTY LTD
16,000,000
3.91 4
PARETO NOMINEES PTY LTD
6,000,000
3.95
BNP PARIBAS NOMS PTY LTD
13,955,135
3.41 5 GETMEOUTOFHERE PTY LTD
4,929,825
3.24
6 ANYSHA PTY LTD
12,500,105
3.06 6
NAUTICAL HOLDINGS WA
PTY LTD
7 DJ CARMICHAEL PTY LTD
10,000,000
2.44 7 ANYSHA PTY LTD
BNP PARIBAS NOMINEES PTY
LTD
MR ADAM ANDREW
MACDOUGALL
MR RUPERT JAMES GRAHAM
LOWE
MOUNT STREET INVESTMENTS
PTY LTD
5,861,286
1.43 8
5,224,902
1.28 9
5,000,000
1.22
5,000,000
1.22
BNP PARIBAS NOMINEES PTY
LTD
R W ASSOCIATES PTY
LIMITED
ADMARK INVESTMENTS PTY
LTD
HSBC CUSTODY NOMINEES
(AUSTRALIA) LIMITED
4,700,000
3.09
4,166,702
2.74
4,149,716
2.73
4,000,000
2.63
2,770,000
1.82
2,656,666
1.75
8
9
1
0
1
0
1
1
1
2
1
3
1
4
1
5
1
6
1
7
1
8
1
9
2
0
2
0
2
0
PATINA RESOURCES PTY LTD
3,333,333
0.81
CITICORP NOMINEES PTY
LIMITED
3,255,792
0.80
GETMEOUTOFHERE PTY LTD
3,053,941
0.75
MR CONNOR MARK ROBINSON
2,965,388
0.72
NAUTICAL HOLDINGS WA PTY
LTD
HSBC CUSTODY NOMINEES
(AUSTRALIA) LIMITED
STONE PONEYS NOMINEES PTY
LTD
2,900,000
0.71
2,509,295
0.61
2,500,000
0.61
KIWI BATTLER PTY LTD
2,452,089
0.60
MR BRYCE HEALY
2,100,000
0.51
MR MARK BARNABA
2,000,000
0.49
MR ENZO BOSIO & MRS
CAMILLA BOSIO
2,000,000
0.49
BALD WINGNUT PTY LTD
2,000,000
0.49
1
0
1
1
1
2
1
3
1
4
1
5
1
6
1
7
1
8
1
9
2
0
DJ CARMICHAEL PTY LTD
2,500,000
1.64
ALLCARE INVESTMENTS PTY
LTD
LAGRAL STRATEGIES PTY
LTD
MRS VICKI GAYE PLAYER &
MR SCOTT JAMES PLAYER
HANNING NOMINEES PTY
LTD
MR CONNOR MARK
ROBINSON
SP FUNDS MANAGEMENT
PTY LTD
MR SHOHAN ASIRI
SENEVIRATNE
MR ADAM ANDREW
MACDOUGALL
2,107,913
1.39
1,548,997
1.02
1,524,781
1.00
1,500,000
0.99
1,488,464
0.98
1,452,591
0.96
1,400,000
0.92
1,375,000
0.90
Unlisted Options on issue per expiry date.
279,926,940
68
109,042,548
71
Unlisted Options
(Exercisable)
$0.06
$0.05
$0.05
$0.10
$0.15
$0.20
$0.05
$0.10
79
Expiry Date
04-Sep-22
30-Jun-22
30-Jun-23
30-Jun-23
30-Jun-24
30-Jun-25
31-Dec-22
31-Dec-23
Number
5,000,000
600,000
600,000
1,500,000
500,000
1,500,000
600,000
600,000
10,900,000
Suite 4, 213 Balcatta Rd
Balcatta WA 6021
T: 08 9240 4111
Share Register:
Link Market Services Limited
Level 12, 680 George Street
Sydney NSW 2000
Telephone: (within Australia): 1300 554 474
Telephone: (outside Australia): +61 (02) 8280 7761
Facsimile: (02) 9287 0303
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Details of Performance Rights issued by the Company during or since the end of the financial year, and
ordinary shares issued as a result of the exercise are:
Tranche
No.
Vesting Condition
1
2
3
2,000,000
2,000,000
2,000,000
Exercise
Price
nil
nil
nil
Share price of $0.25 based on 20-trading day
Share price of $0.35 based on 20-trading day
Share price of $0.45 based on 20-trading day
VWAP.
VWAP.
VWAP.
Expiry
Date
Note 1
Note 1
Note 1
Note 1:
after issue.
Performance Rights are convertible into Shares on a one for one basis for no consideration upon exercise by
the holder on or before the date which is 2 years after issue. Performance Rights are convertible into Shares
on a one for one basis for no consideration upon exercise by the holder on or before the date which is 2 years
There were no securities purchased on-market per ASX Listing Rule 4.10.22 during the reporting period.
Great Southern Mining Limited, incorporated and domiciled in Australia, is a public listed Company limited
1.4 Share Buy-Backs
There is no current on-market buy-back scheme.
1.5 Securities Purchased On-market
2.
Other Information
by Shares.
Review of Operations:
A review of operations is contained in the Directors’ Report.
Company Secretary:
The name of the Company Secretary is Mark Petricevic.
Corporate Governance:
In accordance with Listing Rule 4.10.3, the Company’s Corporate Governance Statement can be found on
the Company’s website. Refer www.gsml.com.au
Address and telephone details of the Company’s Registered Office:
Performance Rights
Details of Performance Rights issued by the Company during or since the end of the financial year, and
ordinary shares issued as a result of the exercise are:
Tranche
No.
Exercise
Price
Vesting Condition
1
2
3
2,000,000
2,000,000
2,000,000
nil
nil
nil
Share price of $0.25 based on 20-trading day
VWAP.
Share price of $0.35 based on 20-trading day
VWAP.
Share price of $0.45 based on 20-trading day
VWAP.
Expiry
Date
Note 1
Note 1
Note 1
Note 1:
Performance Rights are convertible into Shares on a one for one basis for no consideration upon exercise by
the holder on or before the date which is 2 years after issue. Performance Rights are convertible into Shares
on a one for one basis for no consideration upon exercise by the holder on or before the date which is 2 years
after issue.
1.4 Share Buy-Backs
There is no current on-market buy-back scheme.
1.5 Securities Purchased On-market
There were no securities purchased on-market per ASX Listing Rule 4.10.22 during the reporting period.
2.
Other Information
Great Southern Mining Limited, incorporated and domiciled in Australia, is a public listed Company limited
by Shares.
Review of Operations:
A review of operations is contained in the Directors’ Report.
Company Secretary:
The name of the Company Secretary is Mark Petricevic.
Corporate Governance:
In accordance with Listing Rule 4.10.3, the Company’s Corporate Governance Statement can be found on
the Company’s website. Refer www.gsml.com.au
Address and telephone details of the Company’s Registered Office:
Suite 4, 213 Balcatta Rd
Balcatta WA 6021
T: 08 9240 4111
Share Register:
Link Market Services Limited
Level 12, 680 George Street
Sydney NSW 2000
Telephone: (within Australia): 1300 554 474
Telephone: (outside Australia): +61 (02) 8280 7761
Facsimile: (02) 9287 0303
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80
3. Other Additional Information
Tenement Schedule
Registered Holder
Tenement ID
Interest
WESTERN AUSTRALIA
Great Southern Mining Limited
Great Southern Mining Limited
Great Southern Mining Limited
Great Southern Mining Limited
Great Southern Mining Limited
East Laverton Exploration Pty Ltd
East Laverton Exploration Pty Ltd
East Laverton Exploration Pty Ltd
East Laverton Exploration Pty Ltd
East Laverton Exploration Pty Ltd
Great Southern Mining Limited
Great Southern Mining Limited
Great Southern Mining Limited
East Laverton Exploration Pty Ltd
East Laverton Exploration Pty Ltd
East Laverton Exploration Pty Ltd
QUEENSLAND
Great Southern Mining Limited
Great Southern Mining Limited
Great Southern Mining Limited
Great Southern Mining Limited
Great Southern Mining Limited
Great Southern Mining Limited
Great Southern Mining Limited
Great Southern Mining Limited
Great Southern Mining Limited
Great Southern Mining Limited
M38/1256
E38/2829
M38/170
M38/578
M38/740
E38/3476
E38/3518
P38/4523
P38/4524
P38/4525
E38/2442
E38/2856
E38/2587
E38/3362
E38/3363
E38/3364
EPM 18986
EPM 25196
EPM 26527
EPM 26810
EPM 27130
EPM 27131
EPM 27506
EPM 27291
EPM 27459
EPM 27460
100%
100%
100%
100%
100%
100%
100%-Pending
100%-Pending
100%-Pending
100%-Pending
100%
100%
100%
100%-Pending
100%
100%-Pending
100%
100%
100%
100%
100%
100%
100%-Pending
100%
100%-Pending
100%-Pending
Mineral Resource Estimate
On 7 November 2018, the Company released the Maiden Mineral Resource Estimate (Inferred) at its Mon
Ami Gold Project of 1.1M tonnes at 1.7g/t for 59,000 ounces gold, using a cut-off grade of 1.0 g/t gold.
There has been no change to the estimate since being released. From a governance control perspective
refer to the Company’s Corporate Governance Statement noted in Section 2 previously and the Competent
Persons section in the Operating and Financial Review included in this Annual Report for further details.
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